Nourishing a BETTER WORLD Bimbo Integrated Repor… · of Grupo Bimbo’s industry leadership, while enhancing our financial profile by increasing the average tenor of our debt to

BETTER WORLDNourishing a

2017 Integrated Annual Report

1

Nourishing a Better WorldThis is our slogan. For 72 years, we have provided high-quality products to consumers as part of our mission to provide delicious and nutritious baked goods and snacks in the hands of all.

1 Source: IBISWorld Global 2 Calculated with an average FX rate of 2017 of Ps. 18.94

We are the largest baking company in the world1 and a key participant in snacks, generating US $14.1

billion2 in net sales in 2017. Our main product lines include fresh and frozen sliced bread, buns,

cookies, snack cakes, English muffins, ba-gels, pre-packaged foods, tortillas, salt-ed snacks and confectionery products, among others, in 32 countries throughout

the Americas, Europe, Asia and Africa. Our shares trade on the Mexican Stock Exchange

(BMV) under the ticker symbol BIMBO, and in the over-the-counter market in the United States with

a Level 1 ADR, under the ticker symbol BMBOY.

About Us

1 Source: IBISWorld Global 2 Based on an average FX rate of Ps. 18.94 in 2017

2 2017 Integrated Annual Report • BIMBO 3

In Memoriam

2017 Highlights

Grupo Bimbo Today

Our Brands

Letter from the Chairman & CEO

Nourishing a Better World

We Walk a Sustainable Way

About this Report

Building a Sustainable, Highly

Productive and Deeply

Humane Company

Table of Contents4

6

8

36

24

10

66

14 76

1696

19

20

22

100

102

107

198

“We have a firm conviction to develop actions to encourage healthy habits”

With Options for Everyone

We Care for the Environment

We are Active Agents on

Community Development

We Value the Person

Performance Review

Board and Management

Audit and Corporate Practices

Committee Report

GRI Index

Stakeholder Information

Alfred Penny, President of Bimbo Bakeries USA

(GRI: 102-46)

5

daily work ssion

Don Lorenzo Servitje, founder of Grupo Bimbo1918-2017

Don Lorenzo Servitje, founder of Grupo Bimbo1918-2017

In Memoriam4 2017 Integrated Annual Report Summary • BIMBO

“We should see our as a mission, a paand an adventure”


2017 Highlights

Gansito#1 cake in its category

Strong sales growth supported by solid

organic performance and acquisitions

Acquired East Balt Bakeries, Bays Foods, Adghal Group, Ready Roti and Stonemill Bakehouse, diversifying

and broadening our leadership in the baking industry

Entered 10 new countries, significantly enhancing our global profile

Set a record of the number of clients served, reaching more than 3 million points of sale

1st place in Merco’s ranking, as the most responsible company in Mexico, since 2014

Key figuresEconomic and financial(millions of Mexican pesos)

Environmental

Direct (Scope 1,2,3) CO2e emissions (Ton)

(Ton) total waste water consumption

Social

267,515 6.1% increase

4,63021.5% decrease

204,636

1,569,252 303,050 4,886,204 m3

1.96Accident rate 15% decrease vs. 2016400 fewer accidents

27,2886.9% decrease

17,4723.4% decrease

Net sales Net majority income Market capitalization Adjusted EBITDAOperating income

Accessed capital, strengthening our debt profile by increasing the average tenor to 11.4 years

4% decrease of diesel consumption for primary transportation vs. 2016, accumulating 31% in the last 7 years

47% of our product portfolio is in the Best & Better categories*

1% reduction vs. 201692% recycling 18% reduction vs. 2009

Snaps Sea SaltAir-popped popcorn without preservatives, artificial colors or trans fats

*According to Grupo Bimbo’s Nutritional Profiling System(Calculation based on products that represent 80% total sales + new launches)

$123in Donations (millions of pesos)

Total associates worldwide

+ 138,000

(GRI: 201-1, 102-7, 102-8, 305-1, 305-2, 305-3, 403-2)


We are the largest baking Company in the world with presence in 32 countries.

Grupo Bimbo Today

+58,000

+3.0 m

196

routes

points of sale

plants

Our footprint

“Integrity should not only

be seen as compliance with the

law, rules and procedures;

it goes beyond that, it is part of our culture.”

Daniel Servitje, Chairman & CEO

North AmericaSales: 51%

Adj. EBITDA: 46%

MexicoSales: 31%

Adj. EBITDA: 59%

Latin AmericaSales: 11%

Adj. EBITDA: 2%

Sales: 7%Adj. EBITDA: -6%

Europe, Asia & Africa

EBITDA: Earnings before interests, taxes, depreciation, amortization and other non-cash items

(GRI: 102-4, 102-6, 102-7, 306-2, 416-1, 202: 103-1, 103-2, 103-3)


Our Brands

®

®

Marca Reg.

®

®

Marca Reg.

®

®

Marca Reg.

®

®

Marca Reg.

®

®

Marca Reg.

BILLION

+ US $500 Million

+ US $250 Million

+ US $100 Million

Bran

ds

Bran

ds

Bran

ds

Bran

ds10

55

2

+US $1

Our products hold a strong leadership position across marketsWe have developed more than 100 enduring and meaningful brands with top of mind awareness in the markets where we operate.

“We strive to maintain an emotional bond with our consumers and to develop customer loyalty through our brands”

Gabino Gómez, Executive VP

Sliced bread

Buns and rolls

USA Canada Mexico Latin America EAA


#1

#1

#1

#1#1

#1

#1

#1(4)

#1(5)

#2

We develop and offer products with superior quality that nourish and delight our consumers, provide clear information on the nutritional profiles of our products and promote health and wellness initiatives that encourage healthy lifestyles.

Bagels USA Canada Mexico Latin America EAA

#1 #1 #1(7)

Source: Internal information on estimated retail sales by brand during the last 12 months as of September 30, 2017

(GRI:102-2)


English Muffins

Cookies



#1 #1

#2

CakesUSA Canada Mexico Latin America EAA

#1 #1 #1 (1)

Pastries

Tortillas



#1

#1 #1#1

#1 (6)#2 #2 (2)

Salty SnacksUSA Canada Mexico Latin America EAA

#2

ConfectioneryUSA Canada Mexico Latin America EAA

#1

GB market share not within top 2#1 or #2 GB Market share position (1) Excludes Ecuador and Peru, where GB is #2. (2) Excludes Peru, where GB is #1. (3) Market share position for the countries where GB participates in each category. (4) Excludes China and India. (5) Excludes U.K., Portugal (GB #2) and India. (6) Excludes China, Morocco and U.K. (7) Only in the U.K.Source: Nielsen, IRI and Company Information

Not applicable

#2 #2

15

Letter from the Chairman & CEODear shareholders:

2017 was a transition year in terms of reinvestment and restructuring to create long-term value and drive profitability.

The year was marked by several challenging circumstances, includ-ing a difficult global economic and political environment and the se-vere natural disasters we experienced in some of our geographies. Internally, we also faced the restructuring of our Frozen business, as well as operational issues in our U.K. and Chinese markets.

However, this year’s milestones make me feel very proud of Grupo Bimbo. Here is a snapshot:

We captured strategic opportunities to enter ten new countries, through the acquisitions of: Ready Roti in India, a dynamic and growing market; Adghal Group in Morocco; and most recently East Balt Bakeries, now Bimbo QSR, which gives us a leading position within the high-growth QSR business, enabling us to serve customers and quick-service restaurants in a new way.

We also completed two small but strategic acquisitions in the markets where we currently operate: Stonemill in Canada and Bays English Muffins in the United States.

In addition to this, we set a record for the number of customers served on a frequent and regular basis through our DSD system, with more than three million points of sale reached globally.

We have always believed in investing for a brighter future; 2017 was no exception, we worked on a deep industrial

transformation, having successfully in-tegrated 32 plants into our manufacturing footprint and closed ten, resulting in the creation of a lean and efficient foundation for our supply chain.

On the road to our 2020 Vision, we created the Global Transformation Office to accelerate our ten strategic ini-tiatives. In the meanwhile, we launched our business ac-celerator, ELEVA, which offers funding, mentoring and potential commercial alliances to promising startups. This new venture multiplies our possibilities for success in the search for innovation in products and processes.

Having said so, all these initiatives where aimed at

driving profitability for the long run. Among our more than US$680 million investment in CAPEX, we started up a LEED Gold certified plant in Bo-gota and another one in Tepeji del Río, Mexico.

We invested US $70 million in the integration of Donuts Iberia in Europe, which has been a complex process but is already yielding positive results. Similarly, the investments in migrating to a new enterprise technology brought more visibility, improved analytics, and a leap forward for our planning, execution and reporting capabilities.

During the year, the deployment of zero base budgeting generated approximately $160 million dollars in savings.

Given the current situation in Venezuela, we changed our account-ing method for this operation’s financial results to a Fair Value basis, while continuing to serve this market the best we can.

We accessed capital, supporting our strategy to drive the expansion of Grupo Bimbo’s industry leadership, while enhancing our financial profile by increasing the average tenor of our debt to 11.4 years and maintaining health and flexibility in our balance sheet.

These would not have happened without taking care of our people, our communities and our environment. For example, our Safe-ty Incident Rate improved by 15%, with a reduction of 400 accidents.

As part of our sustainability strategy we created a department to focus our efforts on renewable energies. In addition, even with our acquisition-driven growth in the year, we managed to maintain stable environmental performance across our plants.

We continue to remain strongly committed to the ten principles of the UN Global Compact, as well as to the 17 UN Sustainable devel-opment goals.

Although the economic and political outlook for 2018 is uncertain, I am excit-ed for the path ahead, and feel confident about our future growth in the mar-ketplace, and our prospects for increased profitability and financial health.

I anticipate a strong year towards our Vision of transforming the baking in-dustry and expanding our global leadership to better serve more consumers.

DANIEL SERVITJEChairman and CEO

14 2017 Integrated Annual Report Summary • BIMBO

(GRI: 102-14, 102-15, 102-32, 200: 103-1, 103-2, 103-3)

Nourishinga Better WorldOUR CULTURE IS SUPPORTED BY OUR MISSION, VISION, PURPOSE AND BELIEFS. WE ARE MOTIVATED TO BE AN ETHICAL, INNOVATIVE AND PRODUCTIVE COMPANY.

17

VISIONIN 2020 WE TRANSFORM THE BAKING INDUSTRY AND EXPAND OUR GLOBAL LEADERSHIP TO BETTER SERVE MORE CONSUMERS

PURPOSEBUILDING A SUSTAINABLE, HIGHLY PRODUCTIVE AND DEEPLY HUMANE COMPANY

MISSIONDELICIOUS AND NUTRITIOUS BAKED GOODS AND SNACKS IN THE HANDS OF ALL

BECAUSE WE ARE

PR

OD

UC

TIV

E

WE VALUE TH

E P

ER

SO

N

OP

TIO

NS

FOR EVERYONE

A SUSTAINABLE WAY

Our Culture

B

eli

efs

Purpose

Mission

Vision

Nourishing aBetter World

INNOVATIVE

ET

HIC

AL

“Digitizing processes, with agile methodologies, highly engaged and talented teams, to build a sustainable, highly productive and deeply humane company”Raúl Obregón Servitje, Chief Transformation Officer

Thomas’ BagelsIs one of the Top 100 brands in the U.S.

(GRI: 102-16)

19

We Walk a Sustainable Way

We care for our environment and act in consequence

We work on innovations that prove a sustainable mindset

We value the person and respect human rights

We work to create and promote sustainable communities

As part of our strategy, we have adopted the Sustainable Development Goals to help eradicate poverty, protect the planet and ensure prosperity for all.

We recognize the dignity of the person. We value their talent, experience, knowledge and virtues.

Our products are made with superior quality that nourishes and delights. We promote healthy lifestyles.


We Value the Person

We generate economic development, wellbeing for the communities and care for the environment.

WE VALUE TH

E P

ER

SO

N

OP

TIO

NS

FOR EVERYONE

A SUSTAINABLE WAY

Nourishing aBetter World


(GRI 102-16, 102-31, 412-1)


Aboutthis ReportThis is our seventh Integrated Annual Report, which contains glob-al results of our economic, social and environmental activities for the period between January 1 and December 31, 2017, unless oth-erwise indicated.

Through a materiality analysis we have identified the material as-pects that impact the economy, environment and society which results are presented in the report.

Using qualitative and quantitative information, this document cov-ers the annual activities of the following regions: Mexico, the Unit-ed States & Canada, Latin America, Asia and Iberia, unless indicat-ed in each standard. It does not include India, Morocco and QSR operations as these were only recently acquired.

On the other hand, Moldex Mexico, Tenjo 2 Colombia and Cordoba and Frozen Argentina, as well as the Organization of Donuts Iberia (8 Plants), are included as of this year in our report.

It is important to mention that we have not considered for this re-port the data of the following plants since they stopped working during 2017. Also, those plants that closed in 2017, but will remain in operation:

BBU • Sunbury, PA • Owensboro, KY • Sioux Falls, SD • Lubbock, TX

South America • Bimbo Agua de Piedra • Bimbo Argentina - Martínez

CANADA • Plant - St. Come Linieres, QC

MATERIALS• Information covers the 12-month period ended October 2017• Renewable materials include corrugated carton, folding

carton and paper• We are only considering packaging for renewable materials• “Plastic Polyethylene (PE) resin for trays” excludes

renewable materials• Information gathering process

(GRI 102-10, 102-46, 102-48, 102-49, 102-50, 102-51, 102-52, 102-54, 102-56)

For the first time as Grupo Bimbo we reported emissions of Nox, Sox, COVs, PM10 and PM2.5 from manufacturing processes, as well as waste generation and recycling from Bimbo China.

Regarding corporate governance, during 2017 we reported chang-es in our Executive Committee, due to the fact that in the month of August, Mr. Guillermo Jorge Quiróz Abed, who was our CFO, re-tired from the company and his position was occupied by Mr. Diego Gaxiola Cuevas. Likewise, Mr. Raúl Obregón Servitje occupied the position of Chief Transformation Officer in the month of March, and Mr. Rafael Pamias Romero joined the company as Senior VP in the month of November.

“This report has been prepared in accordance with the GRI Stan-dards: Core option”, and the Food Processing Sector Supplement. In addition, we have added the information that must be included in the Mexican Stock Exchange Sustainable IPC Index, and it does not contain an external verification.

Our contribution to the 10 principles of the UN Global Compact, as well as to the 17 Sustainable Development Goals is indicated through-out the report as well as restatements of any information.

For further information on our materiality analysis, stakeholder en-gagement, risk management, governance and policies, please refer to the GRI Index in page. 107 which contains the respective links to our website. For information on our sustainability strategy and man-agement, visit: https://grupobimbo.com/en/sustaintability/sus-tainability-strategy


Building a Sustainable, HighlyProductive and Deeply Humane Company

(GRI 203: 103-1, 103-2, 103-3, 301-307: 103-1, 103-2, 103-3, FP5, FP8)

SUSTAINABLEAll our operations comply with our sustainable way which is our sustainability strategy with four pillars: Wellbeing, Planet, Community and Associates.

Through our Planet Pillar, our actions are aimed to reduce the impacts in the environment and to take care of resources for future generations.

We are focused on reducing our carbon and water footprint, waste management, improving our supply chain and protecting biodiversity. It is based in complying with the laws and regulations of the countries where we operate, promoting compliance with procedures and good practices, monitoring, evaluating and improving environ-mental indicators and impacts as well as the development of innovative technologies to improve processes.

HIGHLY PRODUCTIVE“In Grupo Bimbo we are convinced that the food industry must actively take part injoint actions, to positively impact the health of current and future generations”.

Through our Wellbeing Pillar, we must continue working on our commitments aligned with the World Health Organization strategies and recommendations: create and innovate a wide range of nutritious and good tasting products with an improved nutritional quality, offering accessible, transparent and understandable labelling information to our consumers with a strict compliance with local and global regulations, responsible advertising focused on marketing to children, promote healthy lifestyles for our associates and consumers and strengthen our alliances with strategic players.

Our global Quality Policy, defines our commitment to food safety to assure our foods are always safe.

DEEPLY HUMANE412: 103-1, 103-2

Through our Associates Pillar, we take care of the wellness and safety of our associates, as well as their personal and professional development. As a global company, diversity and inclusion are top priorities.

Our people are and have always been the most im-portant. From our origin and throughout the history of Grupo Bimbo, the person is the center of our pur-pose where Human Rights are implicit.

We promote a culture of sustainability, among our associates, which strengthens the reputation of our company with the whole community in the coun-tries in which we operate.

Through our Community Pillar, we approach com-munities and become part of them, to work as a sustainable company. Each of the communities in which we have undertaken operations, has specif-ic challenges that require attention and support. Through actions oriented to education, communi-ty development and health, we work in partnership with Non-Governmental Organizations (NGOs) to face the challenges of the communities in which we have presence.

https://www.grupobimbo.com/sites/default/files/FGB-EIR-01-Grupo-Bimbo-Global-Sustainability-Policy.pdf

24 2017 Integrated Annual Report • BIMBO


25

Our commitment is to offer products that satisfy our consumer needs, providing clear information on the nutri-tional profiles while promoting health and wellness initiatives that encourage healthy lifestyles.

Product innovation and nutritional quality improvement

Healthy lifestyles & Healthy eating habits promotion and physical activity

Product labeling

Responsible marketing practices aimed to children

Alliances and research

Artesano Artisanal style bread with only 89 calories per slice

(GRI 416: 103-1, 103-2, 103-3, FP4, FP5, FP8)

OUR STRATEGIC PRIORITIES

1. PRODUCT INNOVATION AND NUTRITIONAL QUALITY IMPROVEMENT One of the most significant lines of action within our Health and Wellness strategy, remains that of improving the nutritional profilesof our product portfolio, through deep consumer understanding, innovative technologies, processes and ingredients, focusing in different geographic and demographic zones.We achieve this along four lines of action:

• Step up launches of products with better nutritional profiles aligned to the new eating trends and dietary patterns

• Increase use of positive nutrients and ingredients• Developing products that help cover nutritonal

defficiencies: facing the issue of undernourishment• Portion control

In order to understand the offer of our products based on their nu-tritional quality, we developed an internal nutrimental profiling sys-tem that evaluates nutritional characteristics, assigns a final score and classifies each product in one of four categories:

1. BEST: Represents the highest nutritional quality standard within the products categorization, due to their balance and content

2. BETTER: Products with good nutritional quality that are part of Grupo Bimbo´s portfolio

3. GOOD: Products that may be consumed in alternate consumption due to their nutritional features

4. FUN: Products with the lowest score within the products portfolio, which are focused on a specific moment for consumption in our diets

Innovated 148 “Best and Better”

products in 2017 460 reformulated products


Nutrient profile distribution of product portfolio Grupo Bimbo 2016

14%23%

48%

15%

Best BestBetter Better

Good

Fun

Innovation & ReformulationNutrient profile distribution of product portfolio Grupo Bimbo 2017

41%

28% 19%

12%

Good Fun

10 percentage points increase for Best + Better categories 2016 vs. 2017

27

(GRI 416-1, 416-2)


Sodium reduced products 2017 sales*

Saturated Fats reduced products 2017 sales *

Sugar reduced products 2017 sales*

*vs. comercial sales of the organization



135 plants with Global Food Safety Initiative standards 10% more than in 2016

2. Promoting Healthy Lifestyles, Healthy Eating Habits And Physical Activity

(GRI: 416: 103-1, 103-2, 103-3, 416-1, 416-2, FP5, FP6)

Grupo Bimbo is committed to providing a work environment in which our associates’ health and safety are protected, and to pro-moting healthy lifestyles conducive to full human development and a more efficient operation.

Leadership

Projects

Coaching

AwarenessHealth

Life balance

Physical activity

Hea

lthy

die

t

Barcel USASouth America

Brazil El Globo BimboMexico

CentralAmerica

South America

South America

IberiaBrazil

Barcel Canada

3.9%

9.4%

3.0%

8.4%

30.8%34.5%

18.9%

5.9%

7.8%

0.5%

0.8% 0.4%

23.5%


Using 4 pillars and 4 lines of action, we seek to strengthen a con-tinuous training process for our associates, so they can manage-healthier lifestyles in which everyone can make the best choices and decisions to benefit their safety and wellness. This Model is designed to be the backbone of our wellness initiatives, which are aligned with our Foundations for Safety and Wellness, “We are ca-pable of building a balanced life”.

As of May 2017, we have a Functional Wellness Policy directed at Organization´s leaders to promote implementation of the action plans defined in each pillar.

We also have two indicators to measure the results of our program:

1. Commitment Survey: Evaluates how our associates rate the Wellness Program, in their country.

2. Internal Wellness Certification: Classifies the progress achieved by the internal Wellness program of each Organization, in relation to the Safety and Wellness Model.

We have materials, with which to promote among our associates the right diet and the adoption of healthy lifestyles. These materials include a Guide to Healthy Eating, a Family Cookbook, menus, rec-ommendations for the entire family, a calorie counter program, info-graphs on various health and nutrition issues, as well as workshops and talks by healthcare professionals. We also provide health and diet information at our www.nutriciongrupobimbo.com website.

Our company was recognized in 2017 by the Workplace Wellness Council - Mexico as a health responsible company.

As part of our commitment to the World Health Organization (WHO), we focus our efforts on three fronts:

1. Brand positioning: participant in 7 health and nutrition congresses and expos in 2017 as well as our program of medical visits.

2. Wellness associates: Health and Wellness Strategy, nutrition consultations, Grupo Bimbo’s healthy company cafeterias.

Bimbo Mexico Barcel

10 of 15 are certified7 of 12 are recertified

2 of 7 are certified 2 are recertified

3. Education and Communication: web page, social networks, radio, magazines, newspapers and TV, alliances with civil associations such as the Mexican Diabetes Federation (FMD) and the Celiac Support Association of Mexico (ACELMEX).

Promotion of Physical ActivityAll our work places have activation departments and programs on exercise and other forms of physical activity programs. These pro-grams include ones on Active and Healthy Corporate Challenge, Scale Your Peak Challenge, Live Healthy #EsPorMi, and sports tournaments, among others. Global Energy RaceBimbo’s Global Energy Race is part of our commitment to work continuously in actions that encourage the adoption of healthy lifestyles such as the promotion of correct diets and physical activ-ity. It is known that exercising regularly provides multiple benefits to people.

Our Global Energy Race is also an event with cause: for each kilo-meter a participant runs, Grupo Bimbo donates two slices of bread to food banks. In 2017, thanks to each of the participants, more than one million 200 thousand slices donated to those who need it most.

During 2017, we expanded global participation: • 26% over 2016 levels, and surpassed our goal by 122% • 25% of all our runners were associates, their family members

or friends

Associate participation 2016 2017 Goal

Mexico 9,597 12,672 32%

Global 20,405 25,676 26%

We are capable of building a balanced lifestyle; Working safely and caring for our wellness

“contributes to building a sustainable, highly productive and deeply humane company”.

Every injury can be avoided

We must work safely

We are responsible for each other’s wellness

As a world class company, we must offer exemplary health and safety performance

and constantly improve wellness

We are capable of building a balanced

lifestyle

(GRI 102-31)


+103,645 runners

37 cities21 countries

Country City Bread slices donated

USA

Long Beach 38,580

Philadelphia 20,850

Dallas 15,380

Orlando 16,260

Phoenix 12,870

Mexico

Mexico City 244,792

Guadalajara 52,190

Monterrey 40,902

Puebla 41,524

Veracruz 32,988

Merida 23,654

Panama Panama 16,460

Costa Rica San Jose 21,986

Honduras San Pedro Sula 10,212

Nicaragua Managua 10,044

El Salvador San Salvador 21,820

Ecuador Guayaquil 34,632

Guatemala Guatemala 26,812

Colombia

Bogota 73,368

Cartagena 34,186

Cali 27,650

Argentina Buenos Aires 42,540

Chile Santiago 42,354

Country City Bread slices donated

Paraguay Asuncion 22,500

Peru Lima 33,048

Uruguay Montevideo 44,134

Brasil

Porto Alegre 20,400

Sao Paulo 66,640

Rio de Janeiro 63,920

Portugal Lisboa 25,000

Spain

Barcelona 32,522

Canarias

Madrid 48,540

China Beijing 60,000

UK Sheffield 11,762

Canada

Toronto 10,764

Vancouver 3,084

Quebec City 4,450

TOTAL Bread Slices 1,348,818

Futbolito Bimbo tournaments:Futbolito Bimbo is our girls and boy’s soccer tourna-ment organized since 1959. In 2017 it celebrated its 54th edition in Mexico.

32,530 boys and

15,653 girls Mexico

4,423 teams

1,449 girls’ teams / 2,974 boys’ teams

2,707 schools

210 teams 80 teams

134,976 hrs of physical activity

Presence in the 32 states of the Mexican Republic

45 locations throughout the National Territory

BLACKBIMBO BLUEBIMBO RED

Mexico

USA Chile

+3,200 girls and boys +800 boys and girls


3. LabelingNutritional information, plays an important role in disseminating essential information on the nutritional value and composition of our products. We are committed to stepping up our efforts, to provide consumers easily accessible, transparent and under-standable information, they can use to make informed decisions when purchasing and consuming our products.

One of the most important action lines aligned to these objec-tives is to include in all our packages a simple front of packaged (FOP) label, in addition to our basic nutritional information:

Grupo Bimbo FOP labeling characteristics:1. List of key nutrients to highlight: energy (calories),

saturated fats, total sugars and sodium.2. Located on the frontal panel to facilitate its reading.3. Nutrient content with a reference to the percentages of

daily requirements in the general population´s diet.4. Clear, relevant, readable and understandable format.5. Science-based, verifiable and objective information,

applicable to all food and non-alcoholic beverages categories without exception.

(GRI: 417: 103-1, 103-2, 103-3, 102-12, 417-1, 417-2)

(GRI 419: 103-1, 103-2, 417-2, 417-3, 419-1, FP8)

99% of portfolio with nutritional information

100% of portfolio include ingredient lists

100% regulations compliance

99% compliance in FOP labeling*

5. Alliances and ResearchWe have developed alliances with the authorities, the academic community, research institutes, NGOs and society, that allow us to develop comprehensive programs to achieve a positive impact on consumers wellness.

1. Centro Internacional de Mejoramiento de Maíz y Trigo (CIMMYT)Collaboration agreement, with the objective of stimulating sustainable agriculture practices, that guarantee food secu-rity of the growing population in Mexico and Latin America.

2. International Food and Beverage Alliance (IFBA) Companies´commitment letter, with Mexicans Health, to endorse their support to the National Strategy for the Prevention and Control of Overweight and Obesity.

Sanissimo Quinoa Rice CrackerIs the #1 seller of our rice cake portfolio

“In GB innovation is and will be a priority, an unlimited source of competitive advantage”

Rafael Pamias, Executive VP

3. The Consumer Goods Forum (CGF) Memorandum of Understanding with the PAHO Foundation in favor of health and well-being in Latin America. Health & Well-being pilot program, aimed at consumers, to acquire healthier lifestyles, through nutritional education and the promotion of an active life, implemented in 8 stores in the city of Bogota, Colombia, with an impact on 12,389 consumers.

4. Centro de Experimentación y Seguridad Vial México (CESVI) (Experimental and Mexican Road Safety Center) ISO 39001 in Road Safety.

5. Alianza Latinoamericana de Asociaciones de la Industria de Alimentos y Bebidas (ALAIAB) (Latin American. Associations Alliance for the Food and Beverage Industry)

6. Access to Nutrition Index (ATNI).

*New acquisitions are not included

4. Responsible Marketing Aimed to ChildrenOur advertising campaigns are truthful and promote the strength-ening of ethical values. For that reason, our TV ads reflect a posi-tive focus on morality as well as toward ethnic, religious and polit-ical differences.

In fulfillment of commitments we have established with the Interna-tional Food and Beverage Alliance (IFBA) and our internal Pledge, we have agreed that advertising directed at children under 12, will use only common nutritional criteria based on accepted dietary guidelines, and that we will abstain from advertising to those under 12 with any types of marketing covered under the agreement.

During 2017, Bimbo Ventures, our unit dedicated to finding and promoting high potential projects at Grupo Bimbo, in associ-ation with BlueBox Ventures, Latin America’s largest acceler-ator and venture capital firm, specializing in incubation and startup investments, successfully completed the 1st cycle of ELEVA Food Technology Accelerator.

Increased importance was given, to working closely with start-ups in the search for innovative solutions that may of-fer options to improve product nutritional profiles or may offer final products with the best nutritional profile, to impact our global portfolio.

7.


We Care for the EnvironmentWe develop sustainable actions that can reduce our environmental impacts and take care of our resources and the planet for future generations.

At Grupo Bimbo we are committed to applying good environmental practices in all value chain of each of our products. We have adopted a comprehensive, long-term commitment to assure the efficient use of our resources and seek new technologies in relation to our carbon and water footprint, waste management , use of renewable resources and improv-ing all aspects of our value chain; as our strategy defines.

We have defined material environmental issues, based on assessments of aspects and impacts, including verification of our operations’ performance, legal compli-ance, management of environmental indi-cators and specific requirements made by stakeholders parties.

Mission: Live environmental manage-ment and make it a competitive advan-tage for the company

Vision: For our environmental per-formance to lead to our recognition by 2020 as an agent of change

(GRI 301-307: 103-1, 103-2, 103-3)

(GRI 102-46) PERMANENT ROAD MAP

Compliance & Governance

Environmental Management System

Pilots & New Tech

Improvement

Carbon Footprint Reduction

• Energy Efficiency• Renewable Energy

Water Footprint Reduction

• Water consumption & reuse

• Quality of residual water discharges

• Water scarcity and quality risk analysis

Waste Management

• Reduction/Recycling

• Post-Consumption

Natural Capital (Supply Chain)

• Value Chain initiatives

• Biodiversity

Standards & Best Practices

“We work to bring delicious and nutritious food into everyone’s hands, with the LOWEST IMPACT, throughout all the stages of our value chain”

Javier González Franco, Executive VP

https://www.grupobimbo.com/sites/default/files/FGB-EOP-01%20Global%20Environmental%20Policy%20%28External%29.pdf

Grupo Bimbo Corporate Headquarters, Mexico


Our history

“Committed to the

Environment” program

1991

2001 2002

2007

2017

2012

Sustainability in our strategic objectives

“Sembrando Juntos”

sustainability strategy

Environmental Management

System

First clean-transport

“Clean Industry” certification

Energy savings and rational use

of resources Policy

39

Sustainability value chain From our strategy we are aware of our value chain’s environmental impacts. This year we conducted a plan for each of the global functional areas in our value chain, that projected clear actions for lowering the company’s environmental risks over the coming years to reach the goals, as well as for gauging our impacts along the entire chain.

Carbon footprint

Raw materials

Logistics

Renewable energy

Vehicles

Procurement

Sales centers

R&D

Marketing

Manufacture

Sales

Waterfootprint

Wastemanagement

Naturalcapital

1

6

2

7

3

8

4

9

5

10

(GRI 102-9)


Carbon Footprint (Climate change)

Renewable Energy(GRI 201-2)

Through “Piedra Larga” wind farm, we continue to sup-ply wind power to 52 of our plants, 131 sales centers, 57 El Globo stores, and 2 distribution centers, as well as our corporate headquarters building. The damage the wind farm suffered in relation to the September, 2017 earthquake in Oaxaca, led to a 34% reduction in our clean energy production from 826,973 GJ in 2016 to 545,802 GJ in 2017. We expect to compensate for that loss during the current year, and will continue to advance toward our 2020 target, of providing clean energy to most of our sites in all Grupo Bimbo.

LogisticsRenewable energy

Vehicles

Sales centers

Manufacture

We have set the goal of mitigating climate change, improving and consolidating technologies related to renewable energy, energy ef-ficiency, and energy and fuel resource reduction, transitioning toward an energy system based on renewable technologies, to achieve a reduction of 10% to 2020 in our carbon footprint, and 80% electricity from renewable sources.

The Metropolitan Distribution Center will be the largest solar energy system in Mexico rooftops and the second largest in Latin America, with 2.2 MW power installed. In total, “Bimbo Solar”, will avoid 2,500 tons of CO2e emissions annually, equivalent to reducing oil use by 3,115 barrels or planting 120,000 trees.

(GRI 302: 103-1, 103-2, 103-3)

Piedra Larga wind farm Oaxaca, Mexico

In its first stage “Bimbo Solar” will consolidate 33 systems that together will have an installed capacity of 3.7 MW on 24 sales centers, 7 El Globo Stores, the Corporate building in Mexico City and the Metropolitan Distribution Center, which is currently in construction.


ManufactureWe continue to work globally to develop new tech-nologies and initiatives that allow us to lower our CO2e emissions and achieve efficiencies in our operations’ energy consumption.

Our main energy indicators are detailed in the fol-lowing tables.

INDIRECT ELECTRICITY CONSUMPTIONGrupo Bimbo in GJ 2012 2013 2014 2015 2016 2017

Total indirect consumption of energy from suppliers.

3,072,959 2,473,933 2,243,755 3,099,895 2,910,352 3,310,551

Wind energy 136,186 758,392 787,786 799,490 826,973 596,496

Total 3,209,145 3,232,325 3,031,541 3,899,385 3,737,325 3,907,047

TOTAL ENERGY WITHIN THE ORGANIZATIONGrupo Bimbo in GJ 2012 2013 2014 2015 2016 2017

Total Fuel Consumption from non-renewable sources

20,413,615 17,346,175 14,650,377 16,136,786 16,406,769 16,517,848

Electricity Consumption 3,209,145 3,232,325 3,031,541 3,899,385 3,737,325 3,907,047

Total Energy Consumption 23,622,759 20,578,499 17,681,919 20,036,171 20,144,094 20,424,895

Total Energy Consumption 1% decrease23,351,759 GJ /2017 vs. 23,697,611 GJ/2016

3% decrease of the company´s total energy consumption, from non renewable fuels (LPG gas, CNG, diesel, gasoline) vs. 2016equivalent to 515,574 GJ

Energy consumed by 784,740 100 watts bulbs in a year (lit 5 hrs per day)

(GRI 302-1, 302-2)

BBU was recently named a 2018 Energy Star Partner (EPA) of the Year. On Friday, April 20, 2018 in Washington, DC. BBU was the first company in the food sector ever to be awarded.

All of BBUs bakeries participate with EPA Energy Star.• 14 have received the EPA Energy Star Certification• 7 have received the EPA Energy Star Challenge

For more information about Grupo Bimbo Certificationshttps://grupobimbo.com/en/grupo-bimbo-awards

TOTAL ENERGY OUTSIDE THE ORGANIZATION (3RD PARTY)Total Fuel Consumption from non-renewable sources

2014 2015 2016 2017

860,009

3,617,940 3,553,517 2,926,864


Global initiatives to reduce energy consumption

9% reduction of CO2e from use of LPG in our manufacturing processes

3,459 ton CO2e vs. 2016

Energy Intensity Ratio

RENEWABLE ENERGY

*Scope 1,2 &3 (2015 and 2016 vehicles included, 2017 vehicles and donuts included)

(GRI 302-3)

(GRI 302-1, 302-2)

ENERGY CONSUMPTION Grupo Bimbo in GJ 2012 2013 2014 2015 2016 2017

Natural gas in plants 8,038,092 8,124,529 7,344,243 8,217,035 8,483,167 8,862,003

LP gas in plants 453,960 464,720 499,672 590,921 619,084 609,854

Diesel in plants 24,867 13,827 61,357 60,851 114,698 58,413

Other fuels in plants (fuel oil) 92,567 120,108 113,036 118,370 140,971 123,565

GJ Sub-total in Plants 8,609,486 8,723,184 8,018,308 8,987,177 9,357,919 9,653,835

Natural gas in vehicles - 123 2,805 21,204 73,569 32,084

LP gas in vehicles 44,759 25,693 23,022 28,445 18,021 46,917

Diesel in vehicles 9,650,926 6,461,793 4,548,479 4,680,394 4,405,656 4,222,307

Gasoline in vehicles 2,108,443 2,135,382 2,057,527 2,419,516 2,551,603 2,562,705

Other fuels in vehicles (ethanol)

- - 236 51 - -

GJ Sub-total in Vehicles 11,804,129 8,622,990 6,632,069 7,149,609 7,048,850 6,864,012

Natural gas in 3rd party vehicles

111,140 126,351 110

Diesel in 3rd party vehicles - - 860,009 3,506,800 3,426,909 2,926,321

LP gas 3rd party vehicles 241 389

Gasoline 3rd party vehicles 16 45

GJ Sub-total in 3P Vehicles

-

- 860,009 3,617,940 3,553,517 2,926,864

Total direct consumption of energy from non-renewable primary sources (purchased)

20,413,615 17,346,175 15,510,386 19,754,726 19,960,286 19,444,712

* Data for years between 2014 and 2017 include only 10 months; data for the plants was updated in the February 2018 report.

2017

2016

2015

Scope 1 Scope 2 & 3

1.721.65 1.53

(GRI 302-3, 302-4, 302-5)

3.693.72 3.69

The most replicated initiative to reduce energy consumption was the implementation of more than 95% of LED lamps in Mexico, Colombia, Argentina, Canada, BBU and China, together with the installation of high efficiency motors and equipment update.


1% reduction of CO2e direct emission per product ton (efficiency) manufactured vs. 2016, due mainly to the results obtained in primary distribution, equivalent to 7,095 ton CO2e

49% reduction of Diesel consumption in manufacturing processes vs. 2016 3 consecutive years of reductions

The CO2e absorption capacity of 1,419 Encino trees

The CO2e absorption capacity of 843 Oak trees vs. 2016

Logistics & Sales CentersWe implemented a series of initiatives during 2017, that help us to improve fuel efficiency and reduce CO2e emissions from transport vehicles. The most significant are listed below:

1. Trailer redesignIn Mexico, replaced 35 ft. trailers with a 20-pallet capacity (40 pallets in a double trailer configuration), with a 42 ft. trailer with 24 pallets (48 pallets in a double trailer configuration). These modifications allowed us to transport 17% more pallets per trip.

2. We had 82 intermodal rail hauls in 2017, between Mexico City and Mexicali, achieving 82 railway trips.

3. For the first time, in Grupo Bimbo Mexico, we have a distribution center with a LEED GOLD (Leadership in Energy & Environmental design) certification that together with the one in Tenjo Colombia, are a recognition to the company´s environmental commitment.

On a global level, during 2017, several energy practices were employed that allowed us to sustain preexisting levels of factory environmental performance, even as we operated 20 more factories than in 2016.

(GRI 305-3, 305-5)


VehiclesWe continue working on developing innovations and looking for new technology that can improve our fleet performance in order to decrease our CO2e emissions.

Mexico• Clean Transportation Program: we obtained

environmental ministry certification for a seventh consecutive year.

• Self-regulation Program: We have units certified under a voluntary covenant with the governments of Mexico City and the State of Mexico to voluntarily lower CO2e emissions.

• We have 130 vehicles with particle filters, technology with which emissions to the environment are significantly reduced, with greater fuel efficiency.

• Use of alternative fuels and renewable energy in Mexico. We have 350 electric distribution vehicles that were designed and manufactured by Moldex, a subsidiary of Grupo Bimbo. Also, in the US operations, we have 191 LPG route vehicles, 79 CNG route Vehicles and 59 CNG tractors.

• Moldex: Calculations and testing were conducted to optimize the yield of the 17 Guadalajara trucks, leading to the redesign of battery banks and chargers for better performance. We also achieved delivery of prototypes one and two for Mexico City and much progress was made to assure delivery of units three and four by February 2018.

• Tire renewal: The retreading of tires, reduces carbon dioxide emissions and extends tire life. This approach also avoids the toxic waste entailed in worn-tire disposal.

• Acquisition of equipment with Euro 3 (4%), Euro 4 (15%)

and Euro 5 (5%) technology expanding to 13 the number of specialized units for yard management logistics and bringing the vehicular fleet in Mexico to 35 units while increasing to 23% those with Euro 5 technology. This new technology lowers contaminants thanks to the new units’ use of urea in the combustion process.

Colombia• Bimbo Colombia, consolidated as the first Colombian

company to acquire 3 Euro 4 technology transport vehicles, with selective catalytic reduction, and the entire fleet in Spain rates Euro 5.

• Lower in CO2e emissions and greater fuel savings through a reduction in idling time as well as by raising awareness among drivers.

USA• Bimbo Bakeries USA was chosen as the company with

the best fleet in the first edition of Fleet Owner 500 Award in recognition of our commitment to alternative fuels, particularly propane, having acquired 84 such vehicles just this past year.

China• We are developing an electric vehicle with a battery

that only requires 10 hours to completely recharge, and an operating range of 120 km in summer and 80 km in winter. In addition to the use of sustainable technology, the vehicle achieves its greatest savings on the level of fuel and maintenance. We currently have 231 tricycles that are covering routes totaling 2,187,780 km.

350 electricvehicles incirculation + 80 newfor 2018

185 naturalgas vehicles(CNG)

CO2e EMISSIONS (TON)

Grupo Bimbo 2012 2013 2014 2015 2016 2017

CO2e total direct emissions (scope 1) 1,353,721 1,103,823 909,995 996,822 1,007,591 1,014,167

CO2e total indirect emissions (scope 2) 424,327 300,472 268,290 294,956 292,632 338,112

CO2e total third party vehicle emissions (scope 3) - - 62,040 259,282 254,353 216,973

TOTAL CO2e EMISSIONS FOR GB 1,778,048 1,404,295 1,240,325 1,551,060 1,554,575 1,569,252

4,222,306 GJ diesel consumption from primary transport / -4% vs. 2016 / -31% in the last 7 years

Avoid 144,107 Ton CO2e vs. 2010

CO2e EMISSIONS (TON)

1,007,591

CO2e total direct emissions (scope 1)

2016 20171,014,167

CO2e total indirect emissions (scope 2)

CO2e total third party vehicles

emissions (scope 3)

292,632254,353

338,112

216,973

(GRI 305-1, 305-2, 305-3, 305-5, 305-6)

*We improved with policies and programs the data for outsourcing


OTHER SIGNIFICANT ATMOSPHERIC EMISSIONSGrupo Bimbo 2016* 2017**

Nox (kg) 129,441 378,746

Sox (kg) 777 3,582

PM10 (kg) - 41,426

PM2.5 (kg) - 41,313

OVs (kg) - 22,313

*Nox and Sox 2016 only USA** All Grupo Bimbo except Donuts, Morocco, India and BQS

Water footprint

Manufacture & VehiclesThroughout the company, we promote technologies for reducing water consumption in our manufacturing and cleaning processes and seek to improve wastewater quality for reuse.

(GRI 102-30, 102-31)

To identify how many of our plants are in areas that could eventu-ally experience water stress and prepare the company to deal with future water related scenarios, during 2017 we conducted water risk mapping, using aqueduct’s global water risk mapping tool de-veloped by the World Resources Institute. The next step will be to devise a plan for critical installations involving new technologies.

Main initiatives: • Elimination of 100% cooling towers in Mexico and Central

America operations. More than 24 rain water collection systems installation, to provide water for vehicle washing. (10 in Costa Rica, 9 in Guatemala, 3 in Honduras, 1 in El Salvador and 1 in Mexico) Reduction in sanitary services consumption in our operations: reusing treated wastewater in toilets and y water-free urinals.

(GRI 305-7)

*Scope 1,2 & 3 (2015 and 2016 vehicles included, 2017 vehicles and donuts included.

Scope 1 Scope 2 &3

2016

2015

2017

CO2e EINTENSITY RATIO

(GRI 305-4)

In Grupo Bimbo we promote technologies to reduce water consumption in our cleaning and manufacturing processes. We guarantee water treatment and reuse of water and we seek to reduce our consumption by increasing 10% efficiency by 2020.

Logistics

Vehicles

Sales centers

Manufacture

0.13

0.12 0.12

0.23 0.23 0.23

• Reuse of treated water for services and irrigation in Argentina, Central America and Mexico.

(GRI 306: 103-1, 103-2, 103-3)

New Tech in water treatment systems. Villahermosa, Mexico


(GRI 303-1, 303-2, 303-3)

(GRI 303-1, 303-2, 303-3)

WATER CONSUMED m3

Global 2012 2013 2014 2015 2016 2017

Surface and Ground water

1,548,221 1,334,810 1,272,597 1,191,666 1,187,965 1,128,159

Rainwater collected - 3,965 - - - 1,535

Municipal water supplies or water utilities

3,264,032 3,160,999 2,873,455 3,497,057 3,473,158 3,756,510

Total 4,812,253 4,499,773 4,146,052 4,688,723 4,661,123 4,886,204

18% reduction on water consumption per ton in manufacturing processes, since 2009.

19% increase in waste water treatment from plants, compared to 2016, reaching a 25% cumulative increase of 106,557 m3 in the last 3 years.

43 Olympic pools 10,656 water tank trucks

Global m3 2012 2013 2014 2015 2016 2017

Total volume of water treated and reused

416,003 1,523,300 431,222 420,744 452,646 537,779

% of water treated and reused from the total volume consumed

9% 34% 10% 9% 10% 11%

Waste management (Global)

We improved our products performance, reducing waste and developing better packaging, allowing these to be valued. We also promoted reduction and recycling actions throughout our value chain, to achieve at least 90% recycling in our operations, post-consumption programs in the different organizations in partner-ships with other companies, as well as 30% food waste reduction in the company.

Our global waste management strategy, consists of stratifying the waste and working on its reduction within the value chain. All our waste is treated locally.

(GRI 301: 103-1, 103-2, 103-3, 306: 103-1, 103-2, 103-3, 306-4)

In the last years, we have upgraded all water treatment technology, and replicated best practices to reduce consumption in all our plants.

Logistics

VehiclesProcurement

R&D

Manufacture

Sales


Waste, tons 2014 2015 2016 2017

Recyclables 230,818 254,689 272,078 271,861

Non-recyclables 12,715 14,260 15,696 21,414

Special handling 10,049 8,935 8,206 9,289

Hazardous waste 978 1,258 896 486

Total waste disposal 254,560 279,142 296,876 303,050

Total Waste sent to beneficial uses

240,867.00 263,624.00 280,283.70 281,150.00

Percentage of Total Waste recycled/reused

94.62% 94.44% 94.41% 91.99%

*Bimbo Asia does not report waste as they have yet to be trained in this regard. Canada only reports production waste. For the first time we are reporting waste for Bimbo Asia and in the case of Bimbo Canada we are only considering Food Waste. Th e data excludes Donuts, Morocco, India and BQS recycling programs.

46% reduction in hazardous waste from factory maintenance compared to 2016

21 more 20 TonTorton trucks vs. 2016

Total packaging acquired in 2017207,272 Ton

Renewable materials used in 2017131,823 Ton

Non-renewable materials used in 201775,449 Ton

Percentage of renewable materials in 2017

63.60%

PROCUREMENT(GRI 301-1, 301-3)

Material Metric Ton

2017

Corrugated carton 86,920

Folding carton 44,446

Plastic PE resin 39,855

Plastic PP resin (Transparent)

18,174

Metallic Polypropylene 9,963

Aluminum (foil) 478

OPS 3,909

PET 2,626

Plastic PP resin (Printed) 108

Twist-Tie 64

Specialty Paper - Wax 126

Paper 457

Cornstarch bio plastic tray 145

92% Total Waste inmanufacturingprocesses is reused/recycled

207,272 Ton total packaging purchased

(GRI 301-1, 301-2, 301-3)

In Grupo Bimbo, we improve the use of packaging technologies looking for recyclability, re-duction and circular economy.

Plastic PE resin for trays is not considered

(GRI 301-2, 306-2)

30 Plants with 0 waste to landfill


*Plastic PE resin for trays is not considered

PERCENTAGE OF PACKAGING USED THAT IS RECYCLED INPUT MATERIALSMaterial Metric Ton

2017

Corrugated carton 15,201

PET trays min 50% from recycled waste 826

Paper recycled in corrugated cases 38,052

Recycled HIPS 66

Folding Carton 39,325

Recycled Materials (Tons)* 93,471

Share of recycled materials 45.10%

R&DGLOBAL INNOVATION

Packaging optimization projects are regarded as a priority at Gru-po Bimbo and form part of our Packaging Management Strategy. The strategy’s general objective, is to find technological solutions that can be implemented at all Grupo Bimbo organizations. For that reason, we promote research of technologies, that help us to lower the environmental impact of the waste we generate.

We also conducted a study on the post consumption recyclability of packaging, that demonstrated it is possible to recycle printed and metalized plastic films and wrap, and containing an Oxo degradable additive, as well as the ability to reintegrate them into our processes in the form of trays, distribution truck racks, trash bags or cans, speed bumps, road signs, etc., thereby generating an example of a circu-lar economy.

On the level packaging reduction, in Mexico we validated the use of a polyethylene formula, that improves the mechanical proper-ties of bags, allowing for 12% caliber optimization in the case of White Breads and 17% on Whole Wheat Breads. Moreover, each organization’s local technical teams, developed package optimi-zation projects: Bimbo Bakeries managed to lower caliber 15% on Sara Lee bread bags and 8% on Arnold Brownberry and Oroweat Wide Breads. The implementation is scheduled for 2018.

Barcel Mexico harmonized the structure used for packaging snacks and reduced the use of 31 ton of plastic for the year.

2.3 million kg global reduction in the use of plastic since 2010 with new technologies to reduce the thickness of our packaging

Bimbo Iberia replaced the double packaging system for Thins by eliminating the outer polyethylene bag and now uses only poly-propylene packaging that was traditionally reserved for the un-printed inner bag; that change led to a savings of at least 40% of the packaging material used for this product.

Bimbo Frozen improved its bag formula for fermented bread by increasing its mechanical properties using lineal polyethylene to reduce by 5% the packaging losses and waste released into the environment.

For its part, Chile developed the packaging optimization project that made it possible to reduce plastic usage by close to 230 ton.

https://grupobimbo.com/en/packaging-optimization

93,471 ton of recycled materials 45.1% of all packaging obtained by Grupo Bimbo

(GRI 301: 103-1, 103-2, 103-3)

59

LogisticsWaste reduction initiatives:

Mexico• Implementation of a logistics harness that allows for

product packaging.• Monitor battery use in lifting equipment (forklifts and

hydraulic lifts).

Natural Capital (Supply chain)

SUPPLY CHAINSustainable agriculture As part of our commitment to work towards a sustainable path, and based on the Global Agriculture Policy, in 2017 we signed a collaboration agreement with the International Maize and Wheat Improvement Center (CIMMYT), to promote sustainable agricultur-al practices for the growing populations of Mexico and Latin Amer-ica, which entails:

• Implementation of a model of integrated trade and responsible corn and wheat procurement in Mexico.

• Promoting sustainable agricultural practices to enhance farmer productivity to strengthen the entire value chain.

• Raising the incomes of small-scale producers in the most vulnerable regions through more competitive and profitable conditions.

• Caring for the environment

The pilot projects we will conduct, will be with our strategic allies: Car-gil for corn in the Bajío region as well as the states of Mexico and Hidal-go, and Bunge for wheat in the states of Sinaloa and Sonora, Mexico.https://www.grupobimbo.com/sites/default/files/FGB-EPR-02%20%20Grupo%20Bimbo%20Supplier%20Code%20of%20Conduct.pdf

We developed plans for every global functional area that forms part of our value chain, including clear environmental risk reduc-tion actions for the coming years, as well as improved assessment of our impacts throughout the chain. We currently have informa-tion on the factories, primary and secondary distribution.

Global palm oil policy In 2017, in partnership with The Forest Trust (TFT), we engaged with direct suppliers representing 95% of the company’s palm oil and palm kernel volume. (In 2016, engagement was focused on 90% of volume.) This has included communicating the person at Grupo Bimbo responsible for sourcing commitment, collecting mill level traceability data (95% traceability achieved for top sup-pliers), and tracking policy implementation with first tier suppliers. For suppliers for whom baseline policy implementation data was collected in 2016, we have been able to identify progress & gaps and follow-up directly with them to agree upon concrete opportu-nities and specific milestones for stronger policy implementation. We have also supported on-the-ground engagement with palm oil producers in our supply chain in Central and South America, where most of our palm oil volume originates.https://www.grupobimbo.com/sites/default/files/FGB-EPR-02-Global-Palm-Oil-Policy.pdf

Animal wellness in egg production We have created the Global Egg Policy to be socialized with our main vendors and to be able to define minimum requirements for ensuring our vendors worldwide abide by global animal welfare standards.

Signatory of the Cerrado Manifesto in BrazilGrupo Bimbo became a signatory of the Cerrado Manifesto initia-tive to halt deforestation in Brazil’s Cerrado Tropical Savannah.

The Cerrado region of Brazil extends over 2 million km2. As part of our commitment to sustainability and the environment, we in Gru-po Bimbo have joined those signing the Statement of Support for the Objectives of the Cerrado Manifesto, a call for halting the de-forestation of this region. This initiative promotes a more resilient agriculture and land use, planning practices with which to protect this ecosystem.

(GRI 102-9, 102-10, 308: 103-1,103-2,103-3)

Raw materials

Procurement

Post consumptionIn 2017 we collaborated for the first time with ECOCE in Mexico in-waste collection, at various Futbolito Bimbo events and four Glob-al Energy race sites. We also conducted pilot tests of wrap per collection at some supermarket chains through the ECOCE mobile collection program for collecting flexible polyethylene (bags) that can be exchanged for basic and recycled products through eco-points (kg).

The company participates in different countries post consumption recycling programs, such as Mexico, Brazil, Spain, England and Canada.



Reforestamos MéxicoIn 2017, along with Reforestamos México, A.C., we joined forces with 61 companies, investing resources and more than 13,800 volun-teers, to reforest 196.45 hectares of woodland area and support the conservation of 947.26 hectares of forest ecosystems in Mexico.

According to information provided by Reforestamos México A.C., re-forestation actions in Bosque de la Primavera in Jalisco, the Parque Nacional Cumbres of Monterrey, Nuevo Leon, and the Nevado de Toluca in the State of Mexico, have an estimated 76.00% survival index as of 2017. However, to have updated information for 2018, an external agent is conducting field assessments in each area where trees were planted.

Each of the reforestation efforts are supported during the first three years with a series of maintenance activities that greatly increase

Mexico success storyTo be an agent of change in Mexican agriculture, supporting the development of farmers who grow the products we are inter-ested in, to assure supply, lower imports, generate productivity, and become more sustainable. Our main initiatives are:

WaterIn keeping with the Instituto Nacional de Investigaciones Fore-stales, Agrícolas y Pecuarias (INIFAP) planting protocol, watering is reduced to 4 times (0-45-75-100 days).Water reduction of 807,600 m3/ha (2 million l = 2,000 m3 ha)(Calculated for seed where watering is reduced (4/5), we con-firmed that in the Bajío region, only the irrigations called for in the protocol were applied.)

Agriculture The CIMMYT methodology for wheat and corn will be applied, and we have a tool for measuring the amounts to be applied. This is carried out for agricultural conservation purposes.

Within the 5-5.5 ton/ha average, according to the CIMMYT methodology for responsible management. The strategy is di-rected at reducing tillage and irrigation costs.

Silvopasture system for goatsWith this project, we increased the goat milk production and continued the use of corn silage as a fertilizer to reduce deforestation.

survival rates and generate related social benefits in the form of temporary jobs for people from the supported communities.

(GRI 304-2, 304-3)

(GRI 304: 103-1, 103-2, 103-3, 304-3)

LOCATION OF REHABILITATED HABITAT

Nevado de Toluca in the State of MexicoFlora and Fauna Protection AreaHectares restored109.25Hectares maintained 297.26

La Primaverain the State of JaliscoFlora and Fauna Protection AreaHectares restored 55.50Hectares maintained 650

Tzitzioin the State of MichoacanEcological Restoration AreaHectares restored 1.00

Sierra de Manantlanin the State of ColimaEcological Restoration AreaHectares restored 1.00

Parque Educativoin the State of VeracruzEcological Restoration AreaHectares restored 1.00

Cuenca de la Soledad, Pinal del Zamorano, Temascatio and Parque Bicentenarioin the State of GuanajuatoEcological Restoration AreaHectares restored 7.00

Ciénega de González, El Pajonal, Huasteca, Laguna de Sánchez and San Juan Bautistain the State of MonterreyNational Park Protected AreaHectares restored 6.50

Bicentenario, Rafaela Padilla and Telefericoin the State of PueblaRecreational Park Protected AreaHectares restored 3.50

Sierra de Tepotzotlanin the State of MexicoState Park Protected AreaHectares restored 4.70

Joya la Barreta and El Cimatarioin the State of QueretaroRecreational Park Protected AreaHectares restored 6.75

Kai Lu´umin the State of YucatanRecreational Park Protected AreaHectares restored 0.25

Total Hectares restored 196.45Total Hectares preserved 947.26Total Volunteers 13,807

MEX

ICO

SU

CCES

S ST

ORY


Among our 2017 success stories, we should mention the “Sustain-able Livestock Experience Exchange” organized May 11 and 12 by Reforestamos México, at which livestock ranchers from neighboring El Zapotal Private Reserve in Tizimín municipality, Yucatan, Mexi-co, shared their sustainable livestock good practice experiences with 18 ranchers from five localities in Quintana Roo and Campeche states, and where cattle farming is the main cause of deforestation, due to the need for great extensions of pasture land (0.6 cattle/ha).

For that reason, it has been shown that Silvopastoral Systems (SSPi), offer a very good alternative, as they offer the best environmental services and greatest productivity. They also avoid the release of CO2e deposits in the ground and conserve the site’s biodiversity.

A result of that meeting, the participants decided to set SSPi im-plementation and sustainable livestock good practice commit-ments for their land.

Young Forest EntrepreneurYoung Forest Entrepreneur is an initiative of Reforestamos México A.C., with the support of Grupo Bimbo, CONAFOR, INADEM and BBVA Bancomer, which promotes the talent and business vision of young people in Latin America, through which we seek to increase their skills to develop initiatives in the forestry sector, that promote sustainable resources management and provide ecological solu-tions to deforestation.

In the 2017 edition, we gathered more than 1,300 forestry students, and received 112 proposals, with the participation of 60 Mexican and Latin American universities. The winner on this occasion was the Thara Project of a young entrepreneur from the Agrarian Uni-versity of La Molina, in Lima, Peru.

We will continue with this program in 2018, with the main objective of disseminating the event and invite key audiences to participate in the next edition, since we are convinced that we must trust on the development of change agents that can impact the communi-ties as well as improve our planet for future generations.

PROCUREMENT(GRI 308-1, 308-2, 414: 103-1, 103-2, 103-3, 414-1, 414-2)

In keeping with our 2020 strategy, in 2016 in Mexico we conducted a pilot test with some suppliers, and for 2017 we defined the survey to be applied to all our suppliers of Raw Materials and packaging. The purpose of the survey was to determine the state of the three sustainability pillars that we currently work with in both categories and based on that information design a joint effort strategy to im-pact our sustainability pillars.

(GRI 308-2)

Step one of the Green Purchasing Project is to conduct the sus-tainability survey, to identify each supplier’s potential risks in re-lation to each input handled within the environmental pillar. The survey classifies three levels of compliance: 1 basic, 2 intermediate and 3, the highest levels.

OUR 2017 MAIN RESULTS:

Raw Material Packaging

Level 3: 77%

Level 1: 17%

MEX

ICO

SU

CCES

S ST

ORY

Level 1: 3%Level 2: 20%

Level 3: 81%

Level 2: 2%

63

Wheat Crop Pilot, Mexico

65

DESEO PROGRAM

Develop external business partners (suppliers), promoting a culture of continuous improvement in operations, verifying compliance with the minimum requirements we have set for the various categories for achieving food safety, quality, environmental and occupational safety in the Small Medium Enterprises (SMEs) suppliers.

ScopeThe program is directed at micro, small and medium sized com-panies that are authorized Grupo Bimbo suppliers. The program covers eight categories: food, packaging, freight, maintenance services, building maintenance, vehicles, visibility and maquila.

DevelopmentThere are 5 stages to the process:

1. An initial meeting in which we report on SNE requirements.2. Implementation process and clearing up any doubts.

During this stage, the supplier must cover all the requirements asked of them by Grupo Bimbo.

3. Verification process with a company (SME) visited the suppliers’ premises to verify, using a checklist approved by Grupo Bimbo, compliance with every point requested. The process includes reviewing documents and onsite inspections.

4. SNE process of delivering the action plan. In this stage, the supplier proposes the actions to mitigate or eliminate the problems detected during the verification, along with a deadline for redressing the issues and the name of the person to oversee monitoring of the process.

5. Verification at Grupo Bimbo installations. This stage only applies to the categories of overall maintenance, visibility and building maintenance.

Total SMEs948

Number of SMEs in program466

% Progress49%

“Build to last, build to transform”

Reynaldo Reyna, Chief Services Officer

(GRI 412-3, FP5)

MEX

ICO

SU

CCES

S ST

ORY

https://www.grupobimbo.com/en/our-group/policies



We are Active Agentsof Community DevelopmentWe work in partnership with NGOs to face the challenges of the communities in which we have a presence, to give them back some of what we receive from them.

Alongside NGOs, non-governmental agencies, society, the private and public sectors and through voluntary donations in money and in-kind, on behalf of the company and our associates, we support initiatives focused on wellness, healthy diets, physical activity, en-vironment, community development and education. Also, in case of natural disasters, Grupo Bimbo makes a match to economic do-nations from associates.

Along with organizations from around the world, through Grupo Bimbo´s and associates donations, we support a range of actions that such organizations undertake, and which directly benefit com-munities and society in general.

(GRI 413: 103-1, 103-2, 103-3, 413-1, 413-2, FP4)

DONATIONS PROGRAM(GRI 203: 103-1, 103-2, 103-3, 203-2)

Region Economic Donations Product Donations Total Donations

Mexico 67 39 106

USA/Canada 57 548 605

Latin America 18 237 255

Total 142 824 966

VOLUNTEERINGAt Grupo Bimbo we are committed to society and the world to contribute and face the challenges in an effort to fulfill the Mission of our Volunteer program.

Our volunteering program includes both economic and in-kind donations plus free time contribution from our associates.

Through our program with our more than 22,000 volunteers we sup-port NGOs around the world which develop initiatives to promote healthy diets, wellness, education and care of the environment.

47% of our associates in Mexico contributed through voluntary donations for NGOs and natural disasters

For the year, we recorded 966 economic and product donations worth a combined $123 million pesos, and in support for more than 900 associations.


It is important to mention that for the first time Argentina, Chile, Par-aguay and Peru, simultaneously carried out volunteer activities. The associates from these countries participated by giving their time, during a weekend day, with their families, which enriched the activity.

Bimbo Argentina: We paint your schoolThis action was carried out within the framework of the Corporate Management Volunteer Program and the Diversity and Inclusion Program. More than 20 associates participated with their families, where six classrooms were painted, as well as the corridors of High School 14, in the town of Derqui of Pilar Partido, Argentina, which nearly 100 children attend.

Ideal Chile: A good neighbor related to our culture of Diversity and InclusionTogether with the Good Neighbor and Fundación Mi Parque, 30 volunteers from Bimbo Chile, worked on the recovery project of the four playgrounds of “Arturo Perez Canto” Kindergarden, locat-

ed in the Quilicura district. This institution is located in one of the most vulnerable areas of the sector, where more than 130 boys and girls attends from elementary school, medium school and high school levels of more than 6 nationalities.

Paraguay: We improve the study conditions of young peopleVolunteering was carried out at the Dr. Fernando de la Mora School, where volunteers painted the classroom and planted sev-eral flowers, with the objective of improving the study conditions of the young people who attend this school.

Bimbo Peru: we planted 50 fig trees for the Sagrada Familia ResidenceA group of Bimbo Peru associates, got together to fulfill Brother Miguel´s dream to have green areas and large trees where children could play, teaching them the importance of reforestation and en-vironmental care, through the donation of 50 fig trees, which were planted by our volunteers together with the school children.

VOLUNTEERS IN 2017

Mexico18,101

Latin America3,335

USA & Canada1,159

Asia120

Total 22,715


NATURAL DISASTERSIn keeping with our Natural Disaster Policy, the Global Institutional Relations Department –in the case of Mexico– over-sees operating and managing fund resources; channeling all the requests for donations and/or economic support the Organizations receive and submitting them to approval by the Social Investment Committee. It must also issue a report to the Committee, every six months on all the support awarded.

Social Investment CommitteeDetermine the type of support to provide the community.Authorize the company’s contribution, in-kind and economic, in accordance with what our associates donate.

In the case of economic disbursements, it should set the amount.

Organizations´ Human Relations OfficeSend bulletins inviting associates to make voluntary donations.

Register the support given and report to the Institutional Rela-tions Office on the donations made.

VP of the affected OrganizationMust report the disaster to the company’s Global Institutional Relations Department, which then brings the matter to the at-tention of the Social Investment Committee.

Country´s Operations OfficeDetermine the product to be donated and execute the local coordination as part of current policy.

Through our associates’ donations and the company’s participation, the funds collected in September 2017 in Mexico were assigned to Support on Natural Disasters, for associates and communities affected by last year’s earthquakes.

Total Donation $+37 Million pesos

Economic donations from associates $8.3 M

Grupo Bimbo matched 2 pesos per each peso from associates$16.6 M

Bimbo Canada, Marketing with cause

Global Energy Race donation

194,000 product pieces donation

494 Trips to support community, delivering groceries to affected locations= 3,131 ton

Total Donation Bimbo and Associates $24.9M

Amount in MXN Cause

• Support for the reconstruction of 18 public Schools in Mexico

• Support to 300 associates that were affected by the earthquake in 2017

$0.8M

$4.2 M

$5.4 M

$1.75 M

• Mexican Red Cross Nursing and Emergency School

• Support for earthquakes relief in Mexico

(GRI 419: 103-1, 103-2, 103-3, FP4)

In 2017, due to the earthquakes that affected Mexico, our associates supported the victims with in-kind and economic donations. For each peso they gave, Grupo Bimbo donated two more pesos.

“We seek to transcend and endure through sustainable actions that contribute to the development of our associates and the communities where we live and work , committed with long term value creation”

Raúl Argüelles Díaz González, Chief HR and Corporate Affairs Officer. CSO


GOOD NEIGHBOR(GRI 203-1)

The Good Neighbor program, which we have merged with our Bimbo Volunteers Program, has developed to detect existing needs in the vicinities of our plants, and in this way to implement projects that benefit our neighbors.

Since the program’s launch in 2012, we have contributed 586 projects around the world, helping the communities adjacent to our work centers. These include aspects such as infrastructure improvement, the redesign and restoration of public and private spaces, and repairs, among others.

+ 580 Good Neighbor projects since 2012

23 cleaning days / 18 ton of collected waste in Mexico

Progress on Good Neighbor Program

“DESIERTO DE LOS LEONES ORGULLOSAMENTE LIMPIO” PROGRAM

COMPLETED PROJECTS

Plant/Distribution Centers 2017Finalized Project

Mexico 37

USA & Canada 69

Latin America 24

Asia 1

Europe 1

Grupo Bimbo Grand Total 132

Our Environmental and Social Program arose as an extension of the Limpiemos Nuestro México, National Campaign, created by the Fun-dación Azteca, and sponsored by Grupo Bimbo. Its main purpose is to raise awareness among park visitors and residents in the area about how best to manage the solid waste generated in the forest.

As part of the initial phase of the Program, we achieved the follow-ing in 2017:

1. Installation of 4 containers for solid waste, at diverse locations in the area and one for inorganic solid waste located in the former convent. Each of them, was adapted to comply with Mexico City’s Norms on waste management.

The project´s enviromental leaders have conducted inspections, to assure the proper use and maintenance of the containers, and the members of the “Brigada de los Leones” (Lions Brigade) in charge of cleaning the park, have been given maintenance training and equipment.

2. During 2017, 180 volunteer brigades conformed by families from Cuajimalpa, Mexico, participated in Environmental Education and Clean-up Days.

3. We organized 27 Environmental Education Days helping 1,280 people to understand the importance of the environment preservation.

4. We conducted 22 informational tours around the park. As part of the planned activities, visitors were invited to collect waste misplaced on forestry areas and provided them with collection bags branded with the program’s image. 420 families participated (between June and December).

5. We offered a workshop called “Solid Waste Management in the Desierto de los Leones National Park” to provide park residents waste disposal and usage tools, an initiative that had an impact on 100 individuals.

6. We generated a diagnosis and proposals on handling solid waste and presented it to the local authorities in the Cuajimalpa, Mexico to establish commitments.

7. We developed the “Zero Styrofoam in Desierto de los Leones” project, through which we managed to get 10 businesses near the former convent to sell biodegradable containers.http://www.limpiemosnuestromexico.com

Líderes del mañana (Tomorrow leaders)Through the Líderes del Mañana Distinction, we support the lead-ership and academic talent of brilliant young people – associates relatives- as well as professional and personal development op-portunities, through scholarships in conjunction with TEC of Mon-terrey. We also give them collaborative activities, expanding their vision on the world of business, academic skills and a commitment to become transforming agents.

PROGRESS ON GOOD NEIGHBOR PROGRAM

132132

120

9477

31

2012 2013 2014 2015 2016 2017


Speak Up LineAt Grupo Bimbo, beliefs constitute an essential part of our philos-ophy which always seek to create and provide the best conditions for equal labor, a culture of safety, diversity and inclusion which applies our golden rule: Respect, Fairness, Trust and Care.

We strengthen and promote the Code of Ethics among our associ-ates and Board of Directors, as well as the Code of Conduct among our suppliers. To follow up on its compliance we have a program of Direct Communication: “Línea Comenta” (Speak Up Line) which provides an opportune and trustworthy communication channel to attend any comments about non-compliance of the codes, and which allows us to follow up and solve any report. The program is available to associates and suppliers at the different operating sites of Grupo Bimbo. We are sure that this tool will allow us to work with opportunity in the areas found with need of improve-ment on the different processes. Speak Up Line Committees at-tend and quickly resolve all reports in accordance to the policy.

INCIDENTS 2017 BY TYPE

Labor Relations

SuppliersCode of Ethics

violations

Sexual harassment

Diversity and Inclusion

Safety and Wellness

Total 838in 20 countries

767,738visitors in Mexico

155,504visitors in Latin America

Total 923,242 visitors

Plant visit programThe plant visit program allows us to get closer, listen and share entertaining and learning experiences for our visitors.

We receive children and young people of all ages, from elemen-tary schools to university, foreign educational institutions, people with different abilities, seniors and special guests, consumers, suppliers and other stakeholders.

Our program remains highly successful. Visitors to Grupo Bimbo’s plants learn not only how we make our products but we also share with them talks about different aspects of manufacturing process-es, quality control and care for the environment as well as pro-moting healthy lifestyles, balanced meals, and the importance of being physically active.

Argentina

212 35 18 15 2556

75

( GRI 102-17, 102-33,102-34)


We Valuethe PersonWe recognize the dignity of the person. We value the talent, expe-rience, knowledge and opinions of our associates.

Respect, Fairness, Trust and Care is our Golden Rule

77

(GRI 102-8, 401: 103-1, 103-2, 103-3, 406: 103-1, 103-2, 103-3)

In Grupo Bimbo we are globally committed to strive every day to be the preferred place to work in the industry, assuring we have exemplary leaders who are dedicated to our beliefs, as well as as-sociates loyal to our vision, promoting a culture of diversity, inclu-sion and non-discrimination, that supports Safety and Wellness, and human development.

Our Associate Pillar’s mission is to contribute to our purpose of being “A Sustainable, Highly Productive and Deeply Humane Company”.

Our vision is to lead with superior Safety and Organizational Health, aligning ourselves with continuous improvement.

We are the largest baking company in the world, with more than 138,000 diverse associates from 32 countries

We understand that one of our main tasks is to provide people with productive work and contribute to their development. Each of our work centers, is responsible for hiring the people needed to implement its processes, and to that end we work to provide visi-bility regarding hiring conditions, requirements and job openings. Each year we compile this information to analyze the data and bet-ter understand the way our company works on the level of hiring, turnover and retention.

132,503 Total Associates in Grupo Bimbo

MexicoAssociates on payroll 76,446Outsourcing 444Total 76,890

USA & CanadaAssociates on payroll 25,693Outsourcing 431Total 26,124

Latin AmericaAssociates on payroll 21,214Outsourcing 1,897Total 23,111

AsiaAssociates on payroll 1,332Outsourcing 31Total 1,363

Europeassociates on payroll 4,602Outsourcing 413Total 5,015

Total in Grupo Bimbo payroll 129,287 associates Outsourcing 3,216Total 132,503

PERCENTAGE OF TOP EXECUTIVES WHO HAIL FROM LOCAL COMMUNITIES

Mexico89.7%

USA & Canada90.5%

Latin America32.0%

Asia50.0%

Europe64.3%

Total Grupo Bimbo80.1%

*Total does not include India (2368), Morocco (267), BQ (2,307), Soltex (20), Bays BBU (106), Aryzta BBU (600), which together total more than 138,000 associates.

(GRI 202-2)


EmploymentWe contribute to the goal of being a sustainable, highly productive and deeply humane company through the balance of having the proper number of people contributing their labor from their specific job position, post, and rank, and the compensation that each one receives, which is competitive in relation to the industry average, providing internal equity. We also have two policies that manage our associates’ part or full-time assignment.

It is important for our stakeholders to be aware of our turnover rates, as they convey a sense of stability and confidence, in a company in the hands of experienced and motivated associates, that are evaluated year after year.

Departures (2017) Number of new hires

Regions Active personnel (at December 2017) Total departures Total new associates

Total new associates who quit the

job within the year

Turnover%

Percentage of new associates vs. global total new associates

Mexico 76,444 17,187 13,681 7,271 22 63

Associates under 30 18,847 8,585 8,019 4,580 46 37

Associates between 30 & 50 49,851 7,682 5,577 2,635 15 26

Associates over 50 7,746 920 85 56 12 -

USA & Canada 25,684 2,996 2,967 756 11 14

Associates under 30 3,158 690 1,130 292 22 5

Associates between 30 & 50 10,813 1,238 1,321 344 11 6

Associates over 50 11,713 1,068 516 120 9 2

Latin America 21,211 5,707 3,369 1,298 26 15

Associates under 30 6,080 2,223 1,806 727 37 8


Associates over 50 1,626 367 69 21 23 -

Asia 1,331 576 180 237 43 1

Associates under 30 251 198 62 103 79 -

Associates between 30 & 50 1,026 361 118 134 35 1

Associates over 50 54 17 - - 31 -

Europe 4,602 1,714 1,607 901 37 7

Associates under 30 586 478 375 334 82 2

Associates between 30 & 50 2,504 1,011 968 487 40 4

Associates over 50 1512 225 264 80 15 1

Total Global 129,272 28,180 21,804 10,463 22 100

Associates under 30 28,922 12,174 11,392 6,036 42 52


Associates over 50 22,651 2,597 934 277 - 4

*Does not include India (2,368), Morocco (267), BQ (2,307), Soltex (20), Bays BBU (106), Aryzta BBU (600)*Does not include, owing to a lack of age data: 8 Canada, 2 Barcel Mexico, 1 Moldex, 1 China, 2 South America and 1 Central America.

VPs local participation has increased. 82% local VP´s worldwide

(GRI 102-21, 202: 103-1, 103-2, 103-3, 401-1)


PARENTAL AUTHORIZATION

(GRI 401-3)

CHILD LABOR

TRAINING AND DEVELOPMENT

TOTAL HOURS OF TRAINING

(GRI 408: 103-1, 103-2, 103-3, 408-1, 409: 103-1, 103-2, 103-3)

(GRI 404: 103-1, 103-2, 103-3, 410-1, 412: 103-1, 103-2, 103-3)We do not hire child labor. As part of the selection process, when a candidate is accepted, valid documentation (tax registration, birth certificate, or other official ID) must be provided, showing the person is of working age. Our Human Relations Department’s hiring area, directly conducts the recruitment process and makes certain that the candidates are adults.

We conduct systematic reviews in which we check our associates’ age and seniority to make sure that no one underage is employed at our work centers. And we have no job positions regarded as dangerous.

We are working with our suppliers to assure they respect the la-bor rights of associates, as well as hiring only people of legal work-ing age.

Training is of fundamental importance to Grupo Bimbo, and we constantly seek to share information campaigns that motivate our associates to take courses offered by our “GB University”. Those in charge of the development committee for each organization, oversee and monitor the annual training and development plan.

Each year the Organizations deliver a training and development plan that specifies the total number of sessions, and each month they review how well the plan is being implemented.

The annual goal is to have 10 hours or more of training per associ-ate, in each organization. A record is kept for each organization of the number of hours spent online and, in the classroom, information that is used to better assess the progress achieved each year. It is also im-portant for all the associates to take Human Rights courses, and we have prepared Institutional courses that deal with this subject.

Country Associates who had the right to take time off work for maternity / paternity

Associates who used their right to take time off work for maternity / paternity

Total associates who returned to work after the permit

Total associates who retain their work after one year of having returned to work

Indicator of return to work

Rate of retention

Men Women Men Women Men Women Men Women Men Women Men Women

Mexico 2,531 496 2,531 496 2,530 463 2,530 463 100% 93% 100% 100%

Central America

89 111 89 111 88 108 88 108 99% 97% 100% 100%

South America

135 90 135 89 135 89 135 89 100% 100% 100% 100%

Brazil 81 69 81 69 81 65 68 49 100% 94% 84% 75%

Asia 27 129 27 129 27 128 26 75 100% 99% 96% 59%

GBTALENT WORKING STRUCTURE

Associates categoryTotal training hours

Average hours of training per

associateAssociates % Associates

Female Male Female Male Female Male Total Female Male Total

Hourly & Staff 189,315 812,108 10 9 19,275 93,533 112,808 17% 83% 100%

Supervisors 72,907 291,017 34 28 2,159 10,269 12,428 17% 83% 100%

Managers, Directors, VPs & Presidents

17,887 52,409 18 17 977 3,074 4,051 24% 76% 100%

World Total by Level 280,109 1,155,534 13 11 22,411 106,876 129,287 17% 83% 100%

2015

14%201724%

WOMEN AT EXECUTIVE LEVEL

(GRI 102-7, 404-1)

Population data excludes outsourcing


12 hours of training per woman/ 10 per man

69% of women and 72% of men have received a performance review

TOTAL HOURS OF ASSOCIATE HUMAN RIGHTS TRAINING (GRI 412-2)

CUSUPETotal associates 129,2873,111 associates trained 2.41%

Diversity and inclusionTotal associates 129,2873,796 associates trained 2.94%

Respect in the workplaceTotal associates 129,287220 associates trained 0.17%

(GRI 404-2, 201-3)

During the year, we implemented 24 associates skill build-ing courses and programs for helping with the transition. These include the Onboarding Program all our associates are given when they join the company, as well as other courses directed at leadership positions, Development Managers, hourly personnel, managers and directors.

We have also conducted 2 assistance transition pro-grams, developed to facilitate continuity in managing career terminations resulting from retirement or out-placement, directed at associates over 60 in Mexico. The immediate supervisor along with local Human Relations area, is responsible for directing associates toward Grupo Bimbo transition programs.

(GRI 404-3)

With our associates’ full knowledge, at least once a year, we conduct a performance assessment based on criteria known to the associate and that person’s supervisor. This review can include an evaluation by the immediate su-pervisor, peers or a broader range of associates, and may also involve human relations area.

These evaluations are useful not only for associates de-velopment, but also contribute to human relations man-agement and development within the Organization.

Our Compensation Policy is based on a “Total Rewards” model that takes on a comprehensive approach to compensation, benefits, development and career, and working environment. This approach includes a plan for assuring that compensation is competitive against market.

Our Policy has been developed considering a better quality of life for associates as well as their wellness. For our Mexico operations, we launched a Maternity and Paternity Policy in 2017, which offers

flexible arrangements, leaves of absence and part time jobs. Op-erations outside Mexico follow the criteria set out in their respec-tive countries’ laws. We also developed our new Global Policies for Temporary and Long-term assignees, that will benefit our associ-ates who move to another country where we are present.

At Grupo Bimbo we are developing new and creative initiatives that can reward high-performance associates.

GBTALENT WORKING STRUCTURE

Associates category

Associates who received a regular performance and

career development review during the reporting period”

% of associates who received a regular performance and career development review during the reporting period”

Associates % Associates

Female Male Female Male Female Male Total Female Male Total

Hourly & Staff 12,145 63,648 65% 68% 18,650 92,989 111,639 17% 83% 100%

Supervisors 1,939 8,806 93% 94% 2,090 9,412 11,502 18% 82% 100%

Managers, Directors, VPs & Presidents

891 3,637 91% 94% 982 3,864 4,846 20% 80% 100%

World Total by Level

14,975 76,091 69% 72% 21,722 106,265 127,987 17% 83% 100%

COMPENSATION (GRI 401: 103-1, 103-2, 103-3, 201-3)

(GRI 404-2, 404-3)TALENT EVALUATION

Population data (excludes outsourcing) calculated by the end of May 2017, when the performance evaluation period in Grupo Bimbo concludes


Full time Part time Temporary Regions where it applies

Stock Options, Levels: 1st senior management and directors

XBrazil, Canada, China, Iberia, Central America, South America, Mexico, United Kingdom, USA

Assigned auto, levels: 1st and/or 2nd senior management and/or directors

XCanada, Colombia, Guatemala, Honduras, Iberia, South America, Mexico, Nicaragua, Panama, United Kingdom, USA, Venezuela, Brazil

Maternity or paternity leave X X XCanada, Iberia, South America, United Kingdom, USA, Mexico. Offered to part-time associates in Iberia, United Kingdom, USA, Canada. Offered to temp associates in Iberia, United Kingdom.

Annual performance bonus X XBrazil, Canada, China, Iberia, Central America, South America except Paraguay, Mexico, United Kingdom, USA.

Medical checkup, at least for directors

X Mexico, United Kingdom.

Disability coverage X X XBrazil, Canada, Colombia, Iberia, Mexico, Panama, United Kingdom, USA, Uruguay.Offered to temp associates only in Iberia, United Kingdom.

Life insurance X X X

Argentina, Brazil, Canada, Chile, China, Iberia, Central America, Mexico, Peru, United Kingdom, Uruguay, USA. Offered to temporary associates only in El Salvador, Honduras, Brazil, Canada.

Medical insurance X X X

Offered to all levels in Argentina (except hourly level), Brazil, Chile, Ecuador, Honduras. Offered to executive level associates and higher in Canada, China, Colombia, Costa Rica, El Salvador, Guatemala, Iberia, Mexico, Nicaragua, Peru, United Kingdom, USA.Offered to supervisory levels and higher in Panama.Offered to part-time and temporary associates only in United Kingdom.

Only lists those benefits offered in more than 40% of the countries where GB operates, and to at least one level in the hierarchy.Latin America (South: comprises Argentina, Chile, Peru, Uruguay, Paraguay. Central: comprises Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Venezuela).Iberia comprises Spain and Portugal.

ColombiaCentral AmericaRatio increase in total annual Compensation* 1.0

United StatesBimbo Bakeries USARatio increase in total annual Compensation* 3.3

ChileSouth AmericaRatio increase in total annual Compensation* 1.10

CanadaBimbo CanadaRatio increase in total annual Compensation* 1.16

MexicoBimbo MexicoRatio increase in total annual Compensation* 3.0

BrazilBimbo BrazilRatio increase in total annual Compensation* 3.3

*Number of times that the highest paid associate saw an increase in the percentage of total annual compensation in relation to the median percentage increase in all other associates’ total annual compensation.The data corresponds to the 6 countries with the most significant operations in terms of 2017 estimated sales and number of salaried associates.Calculation includes full time salaried associates, excluding those on part-time, specific project and those assigned to international posts, associates occupying regional posts in the countries under consideration and those associates that were not included in the annual raise because they were promoted or are new hires.The total annual compensation considers annual income based on: base salary, guaranteed compensation, incentives, commissions, short and long-term incentives.

PERCENTAGE INCREASE IN ANNUAL TOTAL COMPENSATION RATIO(GRI 401-2) (GRI 102-39)


RATIO OF BASIC SALARY AND REMUNERATION OF WOMEN TO MEN*

ChileSouth AmericaAdministrative 0.8Supervisors 1.0Executives and Directors 1.1

BrazilBimbo BrazilAdministrative 1.0Supervisors 1.1Executives and Directors 0.9

CanadaBimbo CanadaAdministrative 0.8Supervisors 0.9Executives and Directors 1.0

United StatesBimbo Bakeries USAAdministrative 1.0Supervisors 0.9Executives and Directors 1.0

MexicoBimbo MexicoAdministrative 1.1Supervisors 1.0Executives and Directors 0.7

ColombiaCentral AmericaAdministrative 1.1Supervisors 0.9Executives and Directors 0.7

* Ratio of women’s average earnings compared to the annual compensation of men, by job level.The data corresponds to the 6 countries with the most significant operations in terms of 2017 estimated sales and number of non-operating associates.Calculation includes full time non-operating associates, excluding those on part-time, specific project and those assigned to international posts, associates occupying regional posts in the countries under consideration.The total annual compensation considers annual income based on: base salary, guaranteed compensation, incentives, commissions, short and long-term incentives.

WAGES

We pay above minimum wage in all countries where we are present and make sure the employment and hiring conditions, cover, the minimum required by labor law.

In addition, the compensation of each associate is determined considering performance evaluations, which recognize the achievement or outstanding performance against their established goals and the skills ,as well as, the financial results of our company in each country and globally.

Every associate’s compensation package, corresponds to the person’s job position and what is paid for a similar position in the market in question with the responsibilities and the required experience, education and skills profile.

The wage information used in these comparisons and the respective wage level data are provided by third party consultancies recognized worldwide in labor matters.

USDDATA REPORTED IN 2018

LOCAL CURRENCY ORIGINAL DATA

DEFINITIVEEXCHANGE RATE

AT JAN 11,2018

REPORTED BY ASSOCIATECOUNTRY

MINIMUM WAGE GB MINIMUM

WAGE RATIO COUNTRY MINIMUM WAGE *

GB MINIMUM WAGE **

Mexico

Bimbo 137.65 420.84 3.06 19.26 2,650.80 8,104.31

Barcel 137.65 324.58 2.36 19.26 2,650.80 6,250.56

El Globo 137.65 233.3 1.69 19.26 2,650.80 4,492.80

Corporate 137.65 779.63 5.66 19.26 2,650.80 15,013.73

Moldex 137.65 248.46 1.81 19.26 2,650.80 4,784.70

United States 1,160.00 2,254.31 1.94 1 1,160.00 2,254.31

Canada Bread *** 1,634.11 1,997.36 1.22 1.25 2,039.43 2,492.78

Central America 353.05 376.76 1.07 - - -

South America 414.21 732.34 1.77 - - -

Brazil 293.46 587.56 2.00 3.24 951.15 1,904.38

Asia 365.87 425.69 1.16 6.4 2,342.04 2,725.00

United Kingdom 1,648.46 1,679.23 1.02 0.74 1,218.94 1,241.69

Iberia 918.03 1,266.52 1.38 0.84 767.66 1,059.06

Average 575.03 871.27 2.01 - -

Ratio of entry level average earnings compared to the minimum local wageFigures expressed in the monthly base wage in USD at the exchange rate as of 11/January /2018Source of the exchange rate: https://www.oanda.com/lang/es/currency/converter/* No gender distinctions ** Considering the country’s average monthly base wage for the lowest operating position in GB*** Reported in the minimum wage in GB’s wage structure

RATIOS OF STANDARD ENTRY LEVEL WAGE COMPARED TO LOCAL MINIMUM WAGE

(GRI 405-2)

(GRI 102-35, 102-36, 102-37)

(GRI 202-1)


ETHICS DIVERSITY AND INCLUSION

“We are a Community to which each of the Organizations belongs, sharing the same purpose and beliefs and working with shared processes and systems.

This allows us to pursue common projects, create shared synergies, and enjoy an environment conducive to our associates productively performing, expressing themselves and having the freedom to assume measured risk and operate effectively. We are convinced of our need to act with integrity”.

Daniel Servitje Chairman and Chief Executive Officer

Our Code of Ethics and our Code of Conduct serve as a guide for our behaviors. They spell out the commitments we have assumed as Grupo Bimbo associates, in dealing with the var-ious stakeholders we serve or with whom we interact.

Our Code is subscribed every year through Grupo Bimbo’s internal global associates’ website.

For more information visit www.grupobimbo.com/en/corporate-governance-code

+47,000 hours of “Leading in a Diverse and Inclusive Culture in Grupo Bimbo Seminar”

Our Diversity and Inclusion strategy is specifically focused on gen-erating an inclusive culture in which people from different back-grounds and experiences, have the opportunity to develop and contribute in the transformation of the industry.

Each organization establishes its own action plan based on the most relevant local needs and this is replicated globally.

We provide all our associates Diversity and Inclusion training cours-es, we conduct open and diverse recruitment processes as well as an Executive Development Program. It is important to note that gen-der is not a factor used in setting the wages of our associates.

GLOBAL HIGHLIGHTS 2017USA

• Womens’ Forum continuity and roll out of the network across the country with 42 events.

• Graduation of 12 executive women in the Leadership Circles Program.

Barcel• Launched the program of diversity of generations.

Brazil• Launched the program “In your shoes” to generate

synergies among the functional areas and to foster inclusion.

Corporate• Graduated 16 participants from the Leadership Circles and

started the 2nd generation with 3 mentors and +30 women.

Others• A Diverse Candidate Slate Guideline was launched globally

to foster diversity in the executive and above levels.• Diversity & Inclusion Week, Month and Day are organized in

Iberia, Brazil and Latin Centro.

Talking about Diversity & Inclusion in Grupo Bimbo has become the new norm. Four years ago we started contributing little by lit-tle to the global program to generate greater awareness among our associates about the meaning of living in an inclusive culture, where everyone can feel they belong and can have the same de-velopment opportunities.

Through the Belief, “We Value the Person” we recognize that diversity enriches us and inclusion strengthens us.

Grupo Bimbo seeks to make the most of the talent of each associate so that they can thrive and make things happen every day.

(GRI 102-17) (GRI 405: 103-1, 103-2, 103-3, 405-1, 405-2)


AGE RANGE UNITED STATES AND CANADA Under 30 % 30 to 50 % Over 50 % Total

Administrative and hourly personnel

2,729 10.7% 8,780 34.4% 9,764 38.2% 21,273

Supervisors 197 0.8% 1121 4.4% 926 3.6% 2,244

Executives and Directors 53 0.2% 946 3.7% 1,042 4.1% 2,041

TOTAL 2,979 11.7% 10,847 42.4% 11,732 45.9% 25,558

Not including 134 associates for whom we lack age data or for whom the birthday was improperly recorded. Frozen (126) of whom 2 are executive, 97 operating and 27 administrative, and Bimbo Canada (8) who belong to the operating level

1 administrative associate is not in this report: China (1) there is no information about him

Complete report

3 associates are not in this report: South America- no date of birth (2)Central America- no date of birth (1). 2 are supervisors and 1 administrative

AGE RANGE LATIN AMERICA

Under 30 % 30 to 50 % Over 50 % Total


5,821 27.4% 1,1771 55.5% 1,372 6.5% 18,964

Supervisors 268 1.3% 1,485 7.0% 170 0.8% 1,923

Executives and Directors

2 - 247 1.2% 75 0.4% 324

TOTAL 6,091 28.7% 13,503 63.7% 1,617 7.6% 21,211

AGE RANGE EUROPEUnder 30 % 30 to 50 % Over 50 % Total


543 11.8% 2,040 44.3% 1,149 25.0% 3,732

Supervisors 22 0.5% 274 6.0% 205 4.5% 501


21 0.5% 195 4.2% 153 3.3% 369

TOTAL 586 12.7% 2,509 54.5% 1,507 32.7% 4,602

AGE RANGE ASIAUnder 30 % 30 to 50 % Over 50 % Total


229 17.2% 886 66.6% 37 2.8% 1,152

Supervisors 20 1.5% 106 8.0% 8 0.6% 134


2 0.2% 35 2.6% 8 0.6% 45

TOTAL 251 18.9% 1,027 77.2% 53 4.0% 1,331

WORKFORCE BY AGEAGE RANGE MEXICO

Under 30 % 30 to 50 % Over 50 % Total


17,596 23.0% 43,524 56.9% 6,430 8.4% 67,550

Supervisors 1,230 1.6% 5,509 7.2% 885 1.2% 7,624


72 0.1% 819 1.1% 379 0.5% 1,270

TOTAL 18,898 24.7% 49,852 65.2% 7,694 10.1% 76,444

3 associates are not in this report: MOLDEX (1) and Barcel (2) since there is an error in their age registration, the 3 belong to the Administrative level

BOARD MEMBERS DIVERSITY

Between 30 and 50 years2 Board Members / 12%

1 United States / 6% 1 Spanish / 6% 15 Mexican / 88%

2 Women 12%15 Men 88%

Total Board Members: 17

More than 50 years15 Board Members / 88%


WORKFORCE BY GENDER

1.96 incident rate 15% decrease vs. 2016 / 400 fewer accidents

MexicoAdministrative and hourly personnel58,052 Men / 75.9%9,501 Women / 12.4%

USA CanadaAdministrative and operating16,735 Men / 65%4,670 Women / 18%

Latin AmericaAdministrative and operating15,338 Men / 72.3%3,627 Women / 17.1%

EuropeAdministrative and operating2,766 Men / 60%966 Women / 21%

Bimbo ChinaAdministrative and operating642 Men / 48%511 Women / 38%

Supervisors6,385 Men / 8.4%1,239 Women / 1.6%

Supervisors1,947 Men / 8%297 Women / 1%

Supervisors1,428 Men / 6.7%497 Women / 2.3%

Supervisors418 Men / 9%83 Women / 2%

Supervisors91 Men / 7%43 Women / 3%

Executives and Directors1,018 Men / 1.3%252 Women / 0.3%

Executives and Directors1,530 Men / 6%513 Women / 2%

Executives and Directors261 Men / 1.2%63 Women / 0.3%

Executives and Directors234 Men / 5%135 Women / 3%

Executives and Directors31 Men / 2%14 Women / 1%

Total65,455 Men / 85.6%10,992 Women / 14.4%

Total20,212 Men / 79%5,480 Women / 21%

Total17,027 Men / 80.3%4,187 Women / 19.7%

Total3,418 Men / 74%1,184 Women / 26%

Total764 Men / 57%568 Women / 43%

76,447 25,692 21,214 4,602

1,332

Safety and Wellness

Our Labor Relations VP, addresses any issues with labor unions to bolster the main security objectives considered in our Safety Model.

• reverse the incident rate trend• reach zero accidents • consolidate day by day a safety culture

The Model includes all Grupo Bimbo associates at every level of the organization, to whom we are committed to provide a safe and healthy working environment, as well as a culture of safety and wellness among our associates, their families and the communi-ties in which we work, based on our Global Safety Policy and Glob-al Wellness Policy.

(GRI 102-30, 102-31)

Our Central Committee on Safety and Wellness –comprised of our organizational and personnel directors and safety leaders– work day in and day out to implement measures that allow us to cor-rect any unsafe situation in our work centers, identifying risks and searching for best practices for avoiding accidents at work.

The Committee is provided with the results reported by the sub-committees of each of the organizations, which consist of their health and safety and maintenance teams, associates with initia-tives on matters of Safety and Wellness and by labor union leaders.Furthermore, we conduct safety training and provide information capsules before every meeting of associates.

Injuries Mexico 1,586USA & Canada 425Latin America 311Europe 156Asia 6

Hours workedMexico 181,581,015USA & Canada 51,723,693Latin America 52,952,009Europe 9,069,098Asia 3,827,764

FatalitiesMexico 0USA & Canada 0Latin America 0Europe 0Asia 0

Lost Days Rate Mexico 59.27USA & Canada 105.33Latin America 31.91Europe 82.52Asia 13.74

Days of disability Mexico 53,812USA & Canada 27,239Latin America 8,449Europe 3,742Asia 263

Average Headcount Mexico 74,542 USA & Canada 26,151Latin America 21,546Europe 4,602Asia 1,491

Occupational diseases Mexico 0 USA & Canada 0Latin America 0Europe 0Asia 0

Absentee RateMexico 11.66USA & Canada 8.91Latin America 7.91Europe 18.57Asia 2.20

Injuries Rate Mexico 1.75 USA & Canada 1.64Latin America 1.17Europe 3.44Asia 0.31

*As of September, BF accidents are being reported by BBU and BC; the number of these organizations’ associates does not yet include those of BF, which, therefore, continues to appear as an organization. *Not considering new acquisitions.

Leading foodservice supplier globally

“The Company must be a positive factor in people’s lives”

Pablo Elizondo, Executive VP

(GRI 403: 103-1, 103-2, 103-3, 403-1, 403-2, 403-4, 410: 103-1, 103-2, 103-3)

https://www.grupobimbo.com/sites/default/files/health-and-safety.pdf


We have a detailed registry of occupational illnesses, lesser, greater and serious injuries and fatalities that we use to develop better indicators of injuries and fatality rates per organization. We strictly abide by the legal guidelines of the countries where we have operations.

INCIDENT RATES BY BUSINESS AREACOMMERCIAL INJURIES CLASSIFICATIONS

ALL INCAPACITATING INJURIES

Potentially serious or fatal injuries

Occupational illness

Medically treated non-disabling injuries

Minor injuries Major injuries Fatal injuriesSerious injuries

Potentially serious

or fatal injuries

Occupational illness

Minor injuries Major injuries Serious injuries

Fatal injuries Total disabling injuries

Medically treated non-

incapacitating injuries

Total disabling injuries

INCIDENT RATE BUSINESS AREA

Commercial Operations Services and offices

Dec - 16

Dec - 16

Dec - 17

Dec - 17

689

17 11

860817

2,773 2,9152,477

112

17 214 0108

0

224

181

0451 69

0 02 221 1

1,9851,713

2,042

1,784

% OF INJURIES

4%

26%

70%

Operations

Commercial

Services & Offices

2.42 1.31 0.74

2, 355


Performance ReviewNET SALESConsolidated net sales rose 6.1% in 2017, primarily reflecting or-ganic growth in Mexico and acquisitions including Bimbo QSR, Ready Roti, Adghal Group and Donuts Iberia.

Mexico: 2017 net sales in Mexico rose 10.9%, driven by continued volume gains in every channel, notably the convenience and tradi-tional, as well as price increases slightly below inflation, and a favor-able price mix. The sweet baked goods, snacks and confectionerycategories outperformed, supported by increased client reach, good performance of Vital and Panditas brands, as well as new product launches like Kracao chocolate, under the Ricolino brand.

North America1: Net sales increased 1.8% on a cumulative basis primarily due to good performance of the snacks category, stra-tegic brands in the U.S. and the bread category in Canada, to Ex-change rate benefit, and a 0.4% contribution from the integration of the US operation of Bimbo QSR. Nonetheless, continued pres-sure in the private label, premium and frozen categories contin-ued to weigh on sales.

Latin America2: Net sales declined 1.7%, affected by the change of accounting method for the Venezuelan operation implemented on June 1, 2017. Excluding Venezuela, sales increased reflecting volume growth in the Latin South and LatAm Central divisions, no-

“2017 was an important year for our transformation path, continuous innovation initiatives, our pursuit of the groundwork to boost our profitability going forward and maintain financial flexibility”

Diego Gaxiola Cuevas, Chief Financial Officer

“Takis is now present in 15 countries and became the salty snack corn category

PROFIT BEFORE OTHER INCOME & EXPENSESProfit before other income & expenses declined 3.9% in the year, while themargin contracted 80 basis points. This was due to a combination of thefollowing factors:

tably in Argentina and Colombia; the latter benefited from the new plant that boosted sales for the buns category.

Outperformance in the traditional channel due to ongoing market penetration also contributed to growth in the period.

EAA (Europe, Asia & Africa): Sales in 2017 increased 48%, main-ly driven by acquisitions completed during the last twelve months, including Bimbo QSR, Ready Roti, Adghal Group and Donuts Ibe-ria, which contributed with 45% of the cumulative growth. However, organic performance was affected by integration-related delays in Iberia, and production difficulties in a line in the U.K. and the plant in China.

GROSS PROFITCumulative consolidated gross profit increased 4.9%, while the margin contracted 60 basis points to 53.4%. This was due to high-er raw material costs in Mexico arising from a stronger US dollar reflecting hedges in place, as well as the impact of the afore-mentioned slower sales growth in Iberia coupled with a different business mix in this region due to the incorporation of Bimbo QSR. These effects were somewhat offset by commodity favorability in North America and Latin America.

1 North America region includes operations in the United States and Canada2 Latin America region includes operations in Central and South America

#4”

( GRI 201-2)


I. The impact of the above-mentioned costs pressure in Mexico, which was partially offset by strong volume per-formance and efficiencies coming from cost reduction ini-tiatives such as zero-base budgeting;

II. Higher distribution expenses in Canada, related to soft per-formance in the frozen category and two labor disruptions in Canada, which have been resolved; and

III. Higher general expenses in Latin America, due to the change of accounting method in Venezuela, an operation that had pre-viously contributed to profitability.

OPERATING INCOMEOperating income declined 3.4% from the prior year, with a 60-basis point contraction in the margin to 6.5%, due to the abovementioned operational pressures in some markets coupled with higher inte-gration expenses arising from the Donuts Iberia acquisition, as ex-pected, with approximately US$70 million expensed in 2017. These factors were somewhat offset by:

I. A slight non-cash benefit in North America, arising from the val-uation of the multi-employer pension plans (“MEPPs”) liability;

Matcha red bean filling BreadThe only matcha product of Beijing commercial breads

II. Lower restructuring expenses in North America; andIII. A reduction in non-cash charges vs. the prior year.

In 2017, a Ps. 1,054 million non-cash impairment charge was tak-en, which was lower compared to the prior year figure.

COMPREHENSIVE FINANCIAL RESULTComprehensive Financial Result totaled Ps. 5,755 million in the pe-riod, compared to Ps. 4,591 million in the last year, an increase of Ps. 1,164 million, which reflects the impact of the depreciation of the bolivar and a higher loss from the net monetary asset position in Venezuela, as compared to a gain from the net monetary asset position in the same period of last year, as well as higher indebt-edness level, derived from recent acquisitions.

NEW MAJORITY INCOMENet majority income declined 21.5%, with a 60-basis point con-

traction in the margin t 1.7%, attributable to operating income pressure, higher financing costs and a higher effective tax rate of 52.6%. This tax rate included the following effects:

I. A one-time non-cash charge of Ps. 706 million arising from the enactment of the Tax Cuts and Jobs Act (“Tax Reform”) in the U.S.;

II. Inflationary effects on the monetary financial positions and nondeductible expenses i Mexico;

III. The effect of not recognizing deferred tax benefits in some countries; and

IV. Higher tax rates in some countries, mainly due to improved earnings in the U.S. Earnings per share totaled Ps. 1.0, com-pared with Ps. 1.3 in 2016.

ADJUSTED EBITDAAdjusted EBTIDA decreased 6.9%, with a margin contraction of 140 basis points to 10.2%. The contraction of North American full year EBITDA margin is the result of a non-recurring 4Q16 inventory adjustment.

FINANCIAL STRUCTURETotal debt at December 31, 2017 was Ps. 94.3 billion, compared to Ps. 82.5 billion at December 31, 2016. The 14.3% increase was pri-marily due to the acquisition of Bimbo QSR.

Average debt maturity was 11.4 years with an average cost of 5.2%. Long-term debt comprised 97% of the total; 60% of the debt was denominated in US dollars, 20% in Mexican pesos, 17% in Canadian dollars and 3% in Euros.

The total debt to adjusted EBITDA ratio was 3.5 times compared to 2.8 times at December 31, 2016. The proforma ratio, including Bimbo QSR EBITDA, stood at 3.3 times. The net debt to adjusted EBITDA ratio was 3.2 times compared to 2.6 times at December 31, 2016.

BOARD OF DIRECTORSDaniel Javier Servitje Montull, ChairmanJosé Ignacio Mariscal Torroella Raúl Carlos Obregón del Corral Mauricio Jorba Servitje María Luisa Jorda Castro* Ricardo Guajardo Touché* Arturo Manuel Fernández Pérez* Luis Jorba Servitje María Isabel Mata Torrallardona Nicolás Mariscal ServitjeJavier de Pedro Espínola Ignacio Peréz Lizaur* Edmundo Miguel Vallejo Venegas* Jorge Pedro Jaime Sendra Mata Jaime Chico Pardo Francisco Laresgoiti Servitje Jaime A. El Koury*

Board and Management

* Independent

AUDIT & CORPORATE PRACTICES COMMITTEEEdmundo Miguel Vallejo Venegas, ChairmanJaime Antonio El KouryArturo Manuel Fernández PérezMaría Luisa Jorda CastroIgnacio Pérez Lizaur

EVALUATION & RESULTS COMMITTEERaúl Carlos Obregón del Corral, ChairmanNicolás Mariscal ServitjeLuis Jorba ServitjeEdmundo Miguel Vallejo VenegasDaniel Javier Servitje Montull

FINANCE & PLANNING COMMITTEEJosé Ignacio Mariscal Torroella, ChairmanRicardo Guajardo TouchéLuis Jorba ServitjeRaúl Carlos Obregón del CorralDaniel Javier Servitje MontullJavier de Pedro Espínola

Executive Management

Daniel Javier Servitje MontullChairman & Chief Executive Officer

Pablo Elizondo HuertaExecutive VP

Javier Augusto González FrancoExecutive VP

Gabino Gómez CarbajalExecutive VP

Diego Gaxiola CuevasChief Financial Officer1

Raúl Argüelles Díaz GonzálezChief HR and Corporate Affairs Officer

Raúl Obregón ServitjeChief Transformation Officer2

Reynaldo Reyna RodríguezChief Services Officer

Alfred PennyPresident of Bimbo Bakeries USA

Miguel Ángel Espinoza RamírezPresident of Bimbo, S.A. de C.V.

Ricardo Padilla AnguianoPresident of Barcel, S.A. de C.V.

Rafael Pamias RomeroSenior VP3

Little Bites#1 Selling mini muffins:

- Containing no hight fructose corn syrup

- Zero grams of trans fat per serving


For more information about our corporate governance practices, the professional career of the members of the Board of Directors and the executives, as well as a complete description of the responsabilities of each Committee of the Board of Directors, visit our website.

1Guillermo Jorge Quiroz Abed / Chief Financial Officer (Jan/17 - Aug/17) Diego Gaxiola Cuevas / Chief Financial Officer (Aug/17 - Dec/17)

2Raúl Obregón Servitje / Chief Transformation Officer (Mar/17 - Dec/17)3Rafael Pamias Romero / Senior VP (Nov/17 - Dec/17)

(GRI 102-18, 102-22, 102-23)

www.grupobimbo.com/en/corporate-governance


Audit and Corporate Practices Committee ReportMexico City, March 22, 2018

In conformity with the provisions of the Securities Market Act, the corporate charter of this Company and the Regulations of the Audit and Corporate Prac-tices Committee of Grupo Bimbo, S.A.B. de C.V. (the “Group” or the “Company”), I hereby present to you the report of the activities carried out by the Audit and Corporate Practices Committee (the “Committee”) during the year ended De-cember 31, 2017. In carrying out our work, we abided by the recommendations established in the Code of Best Corporate Practices.

Based on the previously approved work plan, the Committee met eight times during the year, in which it discussed the issues it is legally obligated to consid-er and carried out the activities described below:

INTERNAL CONTROLS(102-29)With the assistance of both Internal and External Auditors, we verified that man-agement had established general guidelines for internal control, as well as the necessary procedures for their application and enforcement. In addition, we fol-lowed up on the remarks and observations made by the external and internal auditors in performance of their duties.

The members of Management responsible for such matters presented us with the plans of action corresponding to the observations resulting from the internal audit, so our contact with them was frequent and their responses satisfactory.

CODE OF ETHICS(GRI 102-17)With the support of the Internal Audit Department and other areas of the Company, we verified compliance by the associates of the Company with the Group’s current Code of Ethics.

We learned of the results and central issues identified in maintaining a hotline for Group associates, and management informed us of the actions taken in those cases.

To the Board of Directors of Grupo Bimbo, S.A.B. de C.V.

Dear Sirs,

INTERNAL AUDIT(GRI 102-20)We reviewed and approved the annual work plan and activities budget for 2017.In each of this Committee’s meetings, we received and approved regular re-ports on the progress of the approved work plan.

We followed up on the comments and suggestions made by the Internal Audit area and verified that Management resolved any deviations from the estab-lished internal controls, and we therefore consider the status of that system to be reasonably correct.

We authorized an annual training plan for personnel of the area and verified its effectiveness. A number of specialized professional firms participated actively in that plan; to maintain the members with updated information on the appro-priate topics.

We reviewed and approved the transformation program to strengthen the In-ternal Audit Department.

FINANCIAL INFORMATION AND ACCOUNTING POLICIES(GRI 102-21)We reviewed the quarterly and annual financial statements of the Company to-gether with the parties responsible for their preparation, recommended their ap-proval by the Board of Directors, and authorized their publication. Throughout the process we took into account the opinions and remarks of the external auditors.

To arrive at an opinion on the financial statements, we verified, with the support of the internal and external auditors, that the accounting policies and standards and the information used by management in the preparation of the financial state-ments was appropriate and sufficient and had been applied in a consistent manner with the prior year, taking into account the changes in International Financial Re-porting Standard effective both in that year and the preceding year. As a result, the information presented by Management reasonably reflects the financial position, results of operations and cash flows of the Company.

COMPLIANCE WITH REGULATORY STANDARDS AND LAWS; CONTINGENCIES(GRI 102-29, 102-30)With the support of the internal and external auditors, we confirmed the ex-istence and reliability of the controls established by the Company to assure compliance with the various legal provisions to which it is subject and assured that these were appropriately disclosed in the financial information.

At the close of each quarter, we reviewed the Company’s various tax, legal and labor contingencies and confirmed that appropriate procedures were in place and consistently followed, so that Management could identify and address them in an appropriate manner.

The Risks Committee informed us of the methodology it follows to determine and evaluate the risks the group faces, and we verified that the risks were being

EXTERNAL AUDITThe independent auditors that provide these services were the same as in pre-ceding years, and a single firm is responsible for auditing the results of all the operations and countries where Grupo Bimbo has a presence, except for the recent acquisitions performed during 2017 in India and the business denomi-nated Bimbo QSR, where they were supported by other firms, who reported the result of their audits to Deloitte for consolidation purposes within the financial statements of Grupo Bimbo, S.A.B. de C.V. and Subsidiaries.

We approved the fee for these auditing services, including additional fees to account for the growth of the Group and other permitted services. We ensured that these payments did not compromise the independence of that firm.

The external auditors presented their approach and work program and areas of interaction with Grupo Bimbo’s Internal Audit department, the Committee approved this presentation. We maintained direct and close communication with the external auditors, and they informed us on a quarterly basis of the progress of their work and any observations they had; we took note of their comments on the quarterly and annual financial statements. We were promptly informed of their conclusions and reports on the annual financial statements.

In addition, we conducted an evaluation of the services of the external auditing firm for the year 2016 and were promptly informed of the preliminary financial statements.

Finally, during 2017 was carried out the contest process for the election of the external auditor for the period 2018-2022, as well as the election of the Transfer Pricing advisor, where Big 4 firms participated: Deloitte, KPMG, EY y PwC, being EY the one elected to be the external auditor, and PwC the advisor on Transfer Pricing matters.

monitored and mitigated where possible, and that they were considered in the work plans of the Internal Auditors.

Management explained to us the main guidelines that govern the anti-corrup-tion policy, as well as plans for its dissemination and for checking on compli-ance with that policy, which we found satisfactory.

COMPLIANCE WITH OTHER OBLIGATIONSWe met with Management executives and officers as we considered necessary to remain abreast of the progress of the Company and any material or unusual activities and events.

We obtained information about significant matters that could involve a possible breach of operating policies, the internal control system and policies on ac-counting records, and we were also informed of corrective measures taken in each case, and found them satisfactory.

We did not find it necessary to request the support or opinion of independent experts, because the issues raised in each meeting were duly supported by the information on hand, and the conclusions reached were satisfactory to Com-mittee members.

TRANSACTIONS WITH RELATED PARTIESWe reviewed and recommended for approval by the Board of each and every related party transaction requiring approval by the Board of Directors for fiscal year 2017, as well as for recurring transactions that are expected to be conduct-ed in fiscal year 2018 that require Board approval.

EVALUATION OF MANAGEMENT(GRI 102-27, 102-28)We reviewed and recommended for approval by the Board the designation, evaluation and compensation of the Chief Executive Officer as well as the members Bimbo’s Executive Committee in 2017.

In my capacity as Chairman of the Audit and Corporate Practices Committee, I reported regularly to the Board of Directors on the activities conducted within the Committee.

The work that we conducted was duly documented in minutes of each meeting, which were reviewed and approved at the time by the Committee members.

Sincerely,

Edmundo Vallejo VenegasChairman of the Audit and Corporate Practices Committee

Grupo Bimbo, S.A.B. de C.V.

(GRI 102-33)


Mexico City, March 22, 2018(GRI 102-45)

In my capacity as chairman of the Audit and Corporate Practices Committee (the “Committee”) of Grupo Bimbo, S.A.B. de C.V. (the “Company”), and in accordance with point e), section II of Article 42 of the Securities Market Act, I hereby present you the opinion of the Committee regarding the content of the report of the Chief Executive Officer regarding the financial situation and results of the Company for the year ended December 31, 2017.

In the opinion of the Committee, the accounting and information policies and criteria followed by the Company and used to prepare the consolidated financial information are appropriate and sufficient, and consistent with international financial reporting standards. Therefore, the consolidated financial information presented by the Chief Executive Officer reasonably reflects the financial situation and results of the Company as of December 31, 2017 and for the year ended on that date.

Sincerely,

To the Board of Directors of Grupo Bimbo, S.A.B. de C.V.

Edmundo Vallejo VenegasChairman of the Audit and Corporate Practices Committee

of Grupo Bimbo, S.A.B. de C.V.

105

®

®

Marca Reg.


GRI Index

107


GRI Standard Disclosure Page / Direct response

GRI 102: General disclosures 2017

1. Organizational profile

102-1 109

102-2 10-13

102-3 109

102-4 8

102-5 109

102-6 8

102-7 6, 8

102-8 6, 76

102-939, 59 https://grupobimbo.com/en/sustaintability/sustainable-grupo-bimbo/value-chain

102-10 20, 21, 59

102-11 https://grupobimbo.com/es/inversionistas/reportes-trimestrales

102-12 31

102-13 34

2. Strategy

102-14 14-15

102-1514-15https://grupobimbo.com/es/inversionistas/reportes-trimestrales

3. Ethics and integrity

102-16 16, 19

102-17 74, 88

4. Governance

102-18 100

102-20 103

102-21 108

102-22 100



102-23 100

102-24 https://www.grupobimbo.com/en/corporate-governance-code





102-29https://grupobimbo.com/en/sustaintability/sustainable-grupo-bimbo/management-structure

102-30 51

102-3119,51https://grupobimbo.com/en/sustaintability/sustainability-strategy

102-32 14-15

102-33 74, 102

102-34 74

102-3586https://www.grupobimbo.com/en/our-group/government-corporate/council-administration/evaluation-and-results-committee

102-36 86

102-3786https://grupobimbo.com/en/sustaintability/our-stakeholders

102-38

102-39 85

5. Stakeholder engagement

102-40 https://grupobimbo.com/en/sustaintability/our-stakeholders








6. Reporting practice

102-45 104

102-46 3, 20, 21

102-47 https://grupobimbo.com/en/sustaintability/our-stakeholders/materiality

102-48 20,21

102-49 20,21

102-50 Jan 16 - Dec 17

102-51 2017

102-52 Annual

102-53 109

102-54 20, 21

102-55 107

102-56 20, 21

GRI Standard Disclosure Page / Direct responseMaterial aspects

GRI 200: ECONOMIC STANDARDS

GRI 103: Management approach 2017

103-1 14

103-2 14

103-3 14

GRI 201: Economic Performance 2017

201-1 6

201-296https://grupobimbo.com/es/inversionistas/reportes-trimestrales

201-3 83 - 84

201-4 https://www.grupobimbo.com/en/our-group/policies

Market Presence


103-2 8, 78

103-3 8, 78

103-3 8, 78

GRI 202: Market presence 2017202-1 87

202-2 77

Indirect Economic Impacts


103-1 22-23

103-2 22-23

103-3 22-23

GRI 203: Indirect Economic Impacts203-1 72

203-2 72

Procurement practices


103-1 9-23

103-2 23

103-3 23



Anti-corruption





GRI 205: Anti-corruption




Anti-competitive Behavior





GRI 206: Anti-competitive Behavior


GRI 300: ENVIRONMENTAL STANDARDSMaterials


103-1 22, 23, 36, 53, 56, 57

103-2 22, 23, 36, 53, 56, 57

103-3 22, 23, 36, 53, 56, 57

GRI 301: Materials 2017

301-1 55

301-2 54

301-3 55

Energy 103-1


103-2 36, 40

103-3 36, 40

103-3 36, 40


GRI 302: Energy 2017

302-1 42, 45

302-2 42, 45

302-3 44

302-4 44

302-5 44

Water


103-1 36

103-2 36

103-3 36

GRI 303: Water 2017

303-1 52

303-2 36

303-3 36

Biodiversity


103-1 36

103-2 36

103-3 36

GRI 304: Biodiversity 2017

304-1 60

304-2 60

304-3 60

304-4 NA

Emissions


103-1 36

103-2 36

103-3 36



Emissions

GRI 305: Emissions 2017

305-1 6, 49

305-2 6, 49

305-3 6, 46, 49

305-4 50

305-5 46, 49

305-6 49

305-7 50

Effluents and Waste


103-1 36, 51, 53

103-2 36, 51, 53

103-3 36, 51, 53

GRI 306: Effluents and Waste 2017

306-1Among the most important legal matters on which each organization reported every two months there were no mentions of any body of water affected by our discharges.

306-2 6, 54

306-3Among the most important legal matters on which each organization reported every two months there were no mentions of any significant spills.

306-4 53

306-5Among the most important legal matters on which each organization reported every two months there were no mentions of any body of water affected by our discharges.

Environmental Compliance

GRI 103: Management approach 2017 103-1 36

103-2 36

103-3 36

GRI 306:Environmental Compliance 2017

307-1In matters of environmental regulations, we complied with the legal requirements of each and every country in which we are present and have not been fined or sanctioned in this regard


Supplier Environmental Assessment


103-1 59

103-2 59

103-3 59

GRI 306:Supplier Environmental Assessment 2017

308-1 62

308-2 62

GRI 400: SOCIAL STANDARDSEmployment


103-1 22, 23, 76, 83

103-2 22, 23, 76, 83

103-3 22, 23, 76, 83

GRI 401: Employment 2017

401-1 78

401-2 84

401-3 80

Occupational Health and Safety


103-1 93

103-2 93

103-3 93

GRI 403: Occupational Health and Safety 2017

403-1 93

403-2 6, 93

404-4 93

Training and education


103-1 81

103-2 81

103-3 81



Training and education

GRI 404: Training and Education 2017

401-1 81

402-2 83

403-3 83

Diversity and equal opportunity


103-1 89

103-2 89

103-3 89

GRI 405: Diversity and equal opportunity 2017

405-1 89

405-2 86

Non-discrimination


103-1 76

103-2 76

103-3 76

GRI 406: Non-discrimination 2017 406-118 cases of discrimination were received, for which the Golden Rule and the Code of Ethics were reinforced, as well as interviews with the headquarters for continuity

Freedom of association and collective bargaining





GRI 407: Freedom of association and collective bargaining 2017


Child Labor


103-1 81

103-2 81

103-3 81

GRI 408: Child Labor 2017 408-1 81


Forced or Compulsory Labor


103-1 81

103-2 81

103-3 81

GRI 409: Forced or Compulsory Labor 2017 409-1 https://www.grupobimbo.com/en/our-group/policies

Security Practices


103-1 93

103-2 93

103-3 93

GRI 410: Security Practices 2017 410-1 81

Human rights assessment


103-1 81

103-2 8

103-3 8

GRI 412: Human rights assesment 2017

412-1 19

412-2 82

412-3 65

Local communities


103-1 66

103-2 66

103-3 66

GRI 413: Local communities 2017413-1 66

413-2 66



Security Practices


103-1 62

103-2 62

103-3 62

GRI 414: Security Practices 2017414-1 62

414-2 62

Supplier social assessment





GRI 415: Public policy 2017 415-1 https://www.grupobimbo.com/en/corporate-governance-code

Customer Health and Safety


103-1 25, 29, 31

103-2 25, 29, 31

103-3 25, 29, 31

GRI 416: Customer health and safety 2017416-1 6, 26

416-2 27

Marketing and Labeling


103-1 34

103-2 34

103-3 34

GRI 417: Marketing and labeling 2017

417-1 34

417-2 34

417-3 25


Customer privacy





GRI 418: Customer privacy 2017 418-1https://www.grupobimbo.com/en/our-group/policies

https://www.grupobimbo.com/en/corporate-governance-code

Socio economic compliance


103-1 34, 70

103-2 34, 70

103-3 34, 70

GRI 419: Socio economic compliance 2017 419-1 34

FOOD PROCESSING SECTOR DISCLOSURES

GRI Page

FP4 6,66,70

FP5 22,24,28,65

FP6 28

FP8 22,24,34


www.grupobimbo.com

Design and production: milenio3genera

2017 Integrated Annual Report

Stakeholder Information

Stock exchange: Mexican Stock Exchange (BMV)

BMV Ticker: BIMBO

ADR Level 1 Ticker: BMBOY

Corporate headquarters: Corporativo Bimbo, S.A. de C.V. Prolongación Paseo de la Reforma No. 1000 Colonia Peña Blanca Santa Fe Delegación Álvaro Obregón, CP 01210 Mexico City +52 55 5268 6600

Investor relations contact: [email protected]

Institutional relations contact: [email protected]

Online: www.grupobimbo.com twitter.com/Grupo_Bimbo facebook.com/GrupoBimbo

ESREMPRESASOCIALMENTE RESPONSABLE

18 años

(102-1, 102-3, 102-5, 102-53)

Documents

Nourishing a BETTER WORLD Bimbo Integrated Repor… · of Grupo Bimbo’s industry leadership, while enhancing our financial profile by increasing the average tenor of our debt to